Sensex Pierces Crucial Barrier On Fii Frenzy

For the first time since the Budget, there was a rally which finally pushed up the major indices above the psychological 4000-barrier.

The spurt in the market was mainly driven by heavy purchases by foreign institutional investors (FII), who picked up scrips at select counters from the A and B group. According to sources, fresh fund allocations for the current quarter could be in the pipeline and may have prompted FIIs to make fresh purchases last week.

The Bombay Stock Exchange Sensitive Index (Sensex) crossed the 4000-mark on the last day of the current settlement and closed at 4029.99 as against the previous weeks close of 3836.44. The Sensex gained 5.04 per cent over the previous Fridays close. On the other hand, the Nifty closed at 1136.30 points against the previous Fridays close of 1082.75, a gain of 4.94 per cent over the previous weeks close.

 

While the market firmed up mainly on FII purchases, the punters too played a vital role in increasing the speculative turnover at both the exchanges. According to sources, the punters have always been very active in the market even when the domestic institutions and FIIs were away. This time around, with the FIIs making a big killing, the punters were not to be left behind, said a NSE dealer.

The money has been pouring into the Indian markets and the main reason why this is happening is that many of the fund managers are bullish about the emerging markets. They are particularly bullish about India, according to a leading BSE broker.

However, some capital market experts fear that the rally could be artificial and till the time of the end of the BSE settlement, one could not be sure whether the funds were actually coming into the market. Market sources said the activity was initially confined to only 10-15 scrips in the A group. The activity was limited to the A group scrips in the early stages. Later on, it spread to other scrips in the A group and later even to some high cap scrips in the B group, said a Mumbai-based equity analyst.

Among the scrips which looked up during the past week NEW DELHI: The Delhi Stock Exchange Sensex zoomed up by a whopping 44.70 points to 849.05 points during last week as the market entered the bull orbit following frantic purchases by FIIs and domestic investors.

Domestic financial institutions particularly, the UTI, after remaining major sellers for several sessions, have virtually stopped selling and resumed buying in some fundamental stocks, said stock brokers.

The FIIs brought multi-national and strong fundamental company shares. Some felt the buying spree was mostly speculative and attributed to rumours that the trend-setter, Reliance Industries, might recommend a bonus share issue ahead of its AGM to be held by the month-end.

Reports that the British American Tobacco , the principal shareholder in ITC, is likely to enhance its controlling stake in the company also boosted the bull run, particularly in ITC, brokers said.

Companies like Asian Hotels, ITC Hotels, Apollo Tyres, LML and Ranbaxy have come out with improved working results for the fiscal year 1996-97, was also welcomed by the marketmen.

CALCUTTA: A boom in major scrips on sustained speculative-cum-investor support characterised trading on the Calcutta Stock Exchange last week as the market sentiment improved appreciably in the wake of excellent results by Tata Tea and a few other companies.

The election of the Congress president also provided additional impetus to the market on the final day of the week when fresh buying emerged in several counters, taking the representative indices to new top levels.

Major scrips scored substantial gains. Tisco closed at Rs 183.70, Tata Tea at Rs 353.60, Reliance at Rs 322.90, SBI at Rs 323.30, Telco at Rs 427 and ITC at Rs 529.70, with IPCL, ICICI, Indo gulf Fertiliser, Larsen & Toubro, UTIs Master share and a host of others also recording perceptible gains.