It's Sensex 12K once more
In less than two months, index has gained nearly 50%
Mumbai: The Bombay Stock Exchange Sensex gained 731 points (6.41%) to close at 12,134, its highest level in seven months. The rise was driven by improving global economic data and continuing investments by foreign investors.
An investment in ICICI Bank stock on March 9 would have doubled by Monday. Racing up from Rs 262 to Rs 529 in the past two months, the private sector bank's stock has been one of the star performers of the Sensex's 3974-point (48.7%) rally since the March low. ICICI Bank alone has contributed 414 points to this rally, which has been propelled largely by the huge inflow of foreign institutional money of nearly $2 billion. Reliance Industries (804 points), Infosys Technologies (294), L&T (288) and HDFC (237 ) are the other major contributors to the index's journey from 8,160 to 12,134 in two months.
Says Amitabh Chakraborty, president-equities, Religare Capital markets: "The fourth quarter (Q4) results so far have been better than the most optimistic estimates in the market. Hence the rally has fundamental grounding aided by a globally heightened risk appetite and liquidity."
Real estate, metals and banking, the sectors that were hugely crippled by the global crisis, have been the key gainers in this broader market rise in the past two months.
While the BSE Realty index led the sectoral gainers, rising 71.5%, the other major gainers were the Bankex and Metals indices, which gained 69% apiece during the period.
The sectors considered safe during the downturn - FMCG, Healthcare and Consumer Durables - were major underperformers during the rally. All these indices gained less than 30% while the Sensex gained nearly 50%.
Experts feel the market is entering a risky territory with the process of government formation likely to take over the combined psyche in the next few days.
Ved Prakash Chaturvedi, CEO, Tata Mutual Fund, says: "Going ahead the market will be choppy as the government formation process gets underway. It will also react to the news of the day from global markets. We are in the early days of spring."
Chakraborty says, "Domestic institutions have so far largely missed the rally, having stayed in cash. Hence, every correction has some support. Geopolitical risks in the subcontinent are on the rise - and one cannot rule out a sharp correction. But it looks like 3,150 is a strong support on the NSE Nifty, although buying could emerge even at the 3,400 level, as the left out feeling (among investors) is very high."
THE SENSEX RALLY
What's driving it:
| Cautious global optimism, FII inflows of $2 billion |
Where the gains went:
| Realty, banking & metals; ICICI and Reliance |
Who were the laggards?
| Consumer non-durables and healthcare |
Will the party last?
| Politics could spoil party, but no one's expecting a crash |
| Top Sectoral gainers |
Top Sensex Contributors |
| Index |
% gain* |
Company |
Points gain* |
| Realty |
71.5 |
Reliance Inds |
804 |
| Bankex |
68.8 |
ICICI Bank |
414 |
| Metal |
68.7 |
Infosys Tech |
294 |
| Capital Goods |
53.6 |
L&T |
288 |
| Oil & Gas |
49.9 |
HDFC |
237 |
Between March 9 and May 4 |
Source: DNA India 05/05/2009
