Sebi move sends Sensex soaring

The Securities and Exchange Board of India's decision to allow mutual funds in derivatives trading lifted the sentiments of the equity markets today. The Bombay Stock Exchange Sensex closed at a new high of 8283.76, up 94.28 points.

Investor wealth touched a record Rs 22.46 lakh crore on the BSE, growing by Rs 24,000 crore today. The market rally was supported by a rise in major indices in the emerging markets.

While foreign institutional investors (FIIs) continued to contribute to the gains in the Sensex, domestic mutual funds, too, joined the party, buoyed by the Sebi move.

Sharmila Joshi, assistant vice-president, Asit C Mehta Investment Intermediates, said, "The market is entering into an euphoric phase. The Sebi announcement on mutual funds helped boost the sentiment. The impact of the move will be seen for some more sessions."

Hiten Sampat of Parag Parikh Securities said FIIs still remained the main driver of the market. The FIIs had invested Rs 158.70 crore yesterday. So far in the month, they have invested Rs 2474 crore, taking their total investment during the year to Rs 35,329 crore ($8.09 billion).

The BSE smallcap index was the star performer today with 2.12 per cent gains, closing at 6253.26 points. Among the sectoral stocks, the metal stocks were the major contributors to the rally.

The BSE metal index gained 1.94 per cent to touch 6796.36 points. Other prominent gainers among the sector indices included oil and gas (1.64 per cent), FMCG (1.60 per cent) midcap (1.53 per cent) and technology (1.07 per cent).

Cement companies remained leading gainers with Grasim Industries topping the list among the Sensex stocks. Gujarat Ambuja Cements and ACC were not left behind. "Improved offtake of cement during the monsoon and firm prices have been keeping these stocks higher," a dealer said.

Among the A-group stocks, GTL India gained by 9.84 per cent to touch Rs 137.90, Hexaware Technologies 8.87 per cent to Rs 113.50, Century Enka 7.18 per cent to Rs 269.45 and Jindal Stainless rose 7.15 per cent to Rs 160.30.

The market breadth widened with advances leading the declines. As many as 1905 stocks (71.71 per cent) advanced today against 704 (26.5 per cent) declines, while 47 stocks remained unchanged.