COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

A day of buying frenzy, profit sales, all-time highs

Indian equities consolidated Monday's sharp gains with the key 30-share Sensex of the Bombay Stock Exchange touching a record high of 4678.28 in early trade. The previous intra-day high was 4643.31 of September 12, 1994.

But Tuesday's early spurt declined towards end on profit sales and end-account considerations at the National Stock Exchange. The BSE Sensex closed at 4615.20, up 29.57 points, or 0.64 per cent from Monday's close.

The S&P CNX Nifty of the NSE closed at 1321.45, up 6.10 points, or 0.46 per cent from Monday's close.

The Sensex's close today was slightly below the record close of 4630.54 of September 12, 1994. The Nifty, however, closed at a record high.

The Sensex opened nearly 60 points higher from the previous close on aggressive buying by short-term operators, anticipating continued fund buying after Monday's sharp 223-point rise, dealers said.

However, profit sales soon after by local funds in blue-chip stocks pruned the Sensex's gains. FII buying was not as high as was seen Monday.

Erratic buying in intra-day trade combined with profit sales to effect oscillations of stocks during the day. The Sensex swung between 4640 and 4665.

But selling on the NSE on end-account considerations scaled down the Sensex's gains by a further 25 points towards close.

Market sentiment was buoyed over the last two days following news early this week that India and Pakistan had agreed upon a solution to the two-month-long Kargil crisis.

Media reports hinted that the 'Islamic intruders' would vacate their positions in Kashmir by Thursday. "The return of peace to Kashmir has played a major role in reviving positive sentiment in the stock markets. The recent improvement in industrial productivity is also a plus factor," said a stockbroker.

Government data released earlier today said that the Index of Industrial Production was up 7.2 per cent on year in May compared with 3.7 per cent a year ago. Industrial output in April-May was up 6.3 per cent, compared with 4.2 per cent in the same period last year.

With war concerns out of the way, investors could consider industrial recovery and invest accordingly, he added.

Leading fund managers and brokers said they expect the rally to continue, given the strong expectations of an economic revival. The Sensex may touch the 5000 mark over the next few days, they felt.

Dealers said that with industry set to pick up, there could be a further rise in investments in India by foreign funds.

This month, foreign funds' net equity purchases were $ 155.3 million up to July 12, compared with $ 82 million in June.

UNI

Business news