The Hindu Business Line : Sensex gains 236 points; volumes remain low

Last week's volatility appears to have given way to a strong start for the Indian equities market, with the benchmark BSE Sensex striking a new intra-day high of 13,726.62 towards the fag end of trading.

While the indices began trading marginally in the positive, they gained momentum as the day wore on for the Sensex to close 236.6 points (1.76 per cent) higher, at 13,708.34, with the intra-day low being 13,490.77. The S&P CNX Nifty rose 1.79 per cent to 3,940.50.

However, volatility is expected on the bourses ahead of the expiry of December futures contracts on December 28. Participation by FIIs is also expected to remain low, with most fund managers away for Christmas and New Year.

MSCI weightage

"The market today moved up on low volumes. The FII presence has been subdued. However, there has been buying by domestic funds and insurance companies. Most foreign funds will take a fresh look at India allocation in the New Year when the new MSCI weightage will be announced," said Mr Amitabh Chakraborty, Head-Research, PCG group, Brics Securities.

India weightage in the MSCI is currently said to be less than 10 per cent.

With call rates ruling at a six-year high of 11 per cent, market participants anticipate further pressure on volumes.

Investment analyst Mr Rajiv Sampath is of the view that markets moving up on low volumes suggest positions being built in anticipation of new FII allocations for FY07.

The market-breadth was strong, with sustained buying in small-cap and mid-cap shares.

On the BSE, 1,652 shares advanced, 954 declined and 66 remained unchanged. The total turnover on the BSE amounted to Rs 3,073.48 crore.

The NSE cash turnover was at its lowest for December at Rs 6,163.81 crore and the NSE F&O turnover dipped compared to its previous close at Rs 36,430.71 crore. As per SEBI data, FIIs were buyers to the tune of Rs 264.8 crore as on December 22. However, provisional FII figures for today on the BSE peg FIIs as net sellers at Rs 210.28 crore.

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