The Hindu Business Line : A new high: Sensex closes above 11,000 mark

Top gainer
The Nifty gained over 1.28 per cent on Monday with a 41.85-point rally to close at 3321.65. HLL was the top gainer among the Nifty 50 stocks.

Mumbai , March 27

The stock markets registered yet another day of dizzying rise, with the Sensex closing well above the 11,000-mark, yet another record.

Spurred by overflowing liquidity, the 30-stock index has gained close to 240 points in the last two trading sessions alone.

On Monday, the Sensex opened strong and zoomed up to a 46-point start and touched a high of 11101.42, before closing trade at 11079.02. At its highest level during the day, the index registered a gain of over 151 points. Overall, the Sensex netted a gain of 128.72 points, an appreciation of 1.18 per cent during the day.

The Nifty gained over 1.28 per cent on Monday with a 41.85-point rally to close at 3321.65. HLL was the top gainer among the Nifty 50 stocks with the stock appreciating by 5.05 per cent at its last traded price of Rs 268.55.

The rating of this scrip was raised by UBS AG as it sees the company being able to improve its top line with the country's economic development and rising incomes. With mutual funds looking to exploit the rural theme for garnering fresh funds, the rise in HLL, a benchmark FMCG stock, should come as no surprise. Tata Steel was the other notable stock to gain with the scrip gaining a shade over five per cent up from Rs 483.30 to Rs 518.00 on the BSE. But software major Wipro didn't participate in today's rally. The stock closed at Rs 520.10, down a shade over two per cent from the previous close of Rs 531.65.

If foreign institutional investors were the drivers of the market in the last calendar year, this year mutual funds have taken their place. In the first three months of this year alone, domestic mutual funds have raised Rs 17,250 crore through their equity fund offerings. This is one third of what the FIIs brought in during the entire calendar year last year.

"With liquidity staying so strong in the market, with both domestic mutual funds as well as FIIs pumping in money into Indian equities, a correction looks elusive," said Mr Hemang Raja, Managing Director and CEO, IL&FS Investsmart.

In the last three months, FIIs have been net investors to the tune of Rs 16,435 crore ($3.66 billion) in the Indian equity market. Mutual funds, in comparison, have made net investments of only Rs 1,484 crore so far. Fund managers, who were awaiting a correction to enter the market, will now be forced to buy stocks at the current levels, according to market analysts. This is the reason liquidity from mutual funds is expected to keep the current bull market afloat, they say.

Despite the giddy rise in the indices, the broad markets have not moved in tandem. The advance-decline ratio for most days during the past month of trade has been largely negative. "The momentum in mid-cap stocks is sector based. Steel is the flavour and all stocks in the sector seem to move up unilaterally. Last week all the sugar scrips moved up," Mr Raja said.

Market participants continue to hope for a healthy correction of 1000-1500 (10-15 per cent) in the Sensex.

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