The stock markets made a smart come back on Friday and the Bombay Stock Exchange benchmark index, Sensex, again closed above the 20000-mark as foreign money poured into the country.

The 30-share BSE Sensex gained 184.17 points or 0.93 per cent at 200045.18, recording its highest level since January 2008. The broader 50-share Nifty of the National Stock Exchange gained 58.75 points to close at 6018.30 after touching an intra-day high of 6029.10.

FII investment

Indian equity market attracted huge funds in the current calendar year as compared to other emerging markets world-over. Foreign institutional investors (FIIs) have invested $17.3 billion in Indian stocks this year, while $4.4 billion was recorded in the current month so far, driving the Sensex up by 11.5 per cent. For the year so far, the Sensex gained 14.8 per cent.

The rally was led by realty stocks which gained 2.78 per cent or 100.02 points at 3695.99 followed by FMCG 1.79 per cent and consumer durables 1.67 per cent.

However, the global markets witnessed a mixed trend as Japan's Nikkei lost 94.65 points at 9471.67 while Hong Kong's Hang Seng gained 71.72 points at 22,119.43 and U.K.'s FTSE 100 ended in the positive territory with 3.75 points at 5543.33.

While writing this report, U.S. stocks rose more than one per cent at the open on Friday.

Meanwhile, sentiment in the Indian financial markets was boosted with the decision of raising the cap on investment by FIIs in the country's debt and bond markets by $10 billion to $30 billion. With the new policy announcement of the government on Thursday, FIIs will be allowed to invest up to $5 billion more in both government bonds and corporate papers after they reached the existing cap of $5 billion and $15 billion in the two instruments, respectively.

Further FIIs are permitted to invest $5 billion in bonds of infrastructure companies and government bonds with a residual maturity of over five years.

Rupee spurts

Meanwhile the rupee recorded a gain of 1.3 per cent during the week against the U.S. dollar, its best weekly gain in three months on Friday.

The rupee closed at 45.25/26 to a dollar as compared to the previous day's close of 45.64/65, after rising to an intra-day high of 45.25, its strongest against the dollar since May 14 this year.

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