The Hindu Business Line : FII-fuelled Sensex tips over 9,000

THE BSE Sensex breached the 9,000-point mark for the first time in Monday's trade but ended 5.06 points below that milestone at a still record-high close.

Foreign institutional investor buying continued to drive the bourse's key index to record a close for the last three sessions in a row.

At the end of trade on Monday, the Sensex was at 8,994.94 points, a gain of 105.91 points.

"It is good that the markets have reached 9,000 points. This upward movement was driven by foreign investors," Mr Pashupati K. Advani, Director, Advani OTC Dealers, said.

A new set of FIIs is currently in the market looking for good buys, he said.

The Sensex crossed the 9,000-point level twice during the day with the high-water mark being 9005.63.

Of the 30 index-weighted stocks, 27 moved up and three declined.

S&P CNX Nifty ended with a gain of 28.55 at 2712 points.

All indices on the BSE and the NSE moved up, indicating the depth of the upward movement in stock prices.

"Domestic funds as well as foreign investors were pumping in money.

"A lot of retail and short-term players who had missed the chance earlier were buying today," said Mr Jayesh Shroff, Fund Manager, BOB Asset Management Co Ltd.

He believed that this time around, the rally had witnessed qualitative buying.

"Be it small cap or mid-cap, buyers are looking for credible purchases," he said.

Among the index-weighted stocks, Hindustan Lever Ltd was the biggest gainer, rising by 3.73 per cent or Rs 6.90 to Rs 191.95.

Reports that the FMCG major had marked up the prices of some of its detergent brands helped the upturn, dealers said.

The other big gainer in percentage terms was BHEL, which ended with a 3.05 per cent gain at Rs 1,467.75.

"The market has the potential for another upward movement of 150 points before any likely decline," said Mr Samir Porecha, Director, Porecha Global Securities Pvt Ltd.

Auto stocks witnessed some purchases on Monday.

At least three of the major auto stocks moved up by more than 2 per cent — Bajaj Auto, Rs 2119.70 (up by 2.67 per cent); Maruti Rs 632.45 (up by 2,24 per cent) and Tata Motors Rs 586.80 (up by 2.53 per cent).

Mr Shroff of BOB Asset Management held that the market's eventual correction would be moderate and not huge declines as seen in the previous rallies.

FII investment would continue to be the major driver of Indian stocks' buoyancy, dealers and fund managers said.

"India is a growth story. Last time, we saw a lot of tech stock buying.

"This time, there is buying in capital goods, cement and infrastructure," Mr Advani said.

FII investment on Indian bourses stood at $810.40 million until November 28, 2005, SEBI said.

In the previous two sessions alone, FIIs had invested $64.1 million in Indian stocks.

This year so far, FIIs have invested $8562.30 million.

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