Sensex ends year with 9% gain; uncertain 2014 looms

The BSE Sensex edged higher on Tuesday, sending the index to a 8.9 per cent annual gain and a record high this year, as foreign investor flows offset widespread concerns about a domestic economy suffering from low growth but high inflation.

Foreign institutional investors bought a net $20.1 billion worth of shares so far this year, according to provisional regulatory data, marking a second consecutive year of purchases after their $24.5 billion in 2012.

The strong foreign buying concentrated on exporters such as Tata Consultancy Services (TCS) and Sun Pharmaceutical Industries that were the top gaining shares this year. TCS and Sun Pharmaceutical benefited as the rupee hit a record low in late August.

However, analysts worry those foreign flows could ebb, leaving Indian shares exposed at a time when concerns about the economy abound, while the country faces the prospect of uncertain general elections due by May.

The Sensex closed at 21,170.68, up 27.67 points for the day. For the year, the Sensex rose 8.9 per cent, compared with a 25.7 per cent gain last year, a middle-of-the-pack performance in local currency terms for Asia-Pacific exchanges, according to exchanges tracked by Thomson Reuters.

The Nifty held 0.21 per cent on the day to end at 6,304, advancing 6.8 per cent this year.

Exports dependent software service providers and pharmaceutical companies were the top performers this year, with many shares hitting a record high, benefiting from the weak rupee and growth recovery in the United States and Europe.

HCL Technologies' shares doubled this year, while TCS, and Wipro surged 73 per cent and 61.3 per cent, respectively. Infosys shares surged 50.3 per cent in 2013.

Sun Pharma and Lupin rose over 54 per cent and 47 per cent, respectively, for the year.

On Tuesday, blue chips were the leading gainers, with Reliance Industries Ltd closing up 0.9 per cent, Tata Motors ending 0.4 per cent higher and Tata Consultancy Services gaining 0.7 per cent.