Heavy buying in blue chip stocks by domestic funds
MUMBAI: The Bombay Stock Exchange benchmark index (Sensex) on Monday snapped a two-day losing streak and added 302 points, thanks to excellent fourth quarter earnings and a liberal bonus from Infosys Technologies, even as investors bet heavily on key scrips.
Infosys Technologies not only announced better-than- expected fourth quarter earnings and a 1:1 bonus, but also forecast better earnings ahead on outsourcing boom, indicating an encouraging earnings season.
The market was so jubilant over the development that the 30-share index (Sensex) scored the biggest gains of 302.45 points since May 18, 2004 when it soared by 371.86 points.
The Sensex opened with a big bang at 11,323.74 and later touched an intra-day high of 11,560.90 before closing at 11,539.68. It had closed at 11,237.23 on Thursday.
Operators and retailers reportedly covered positions in the Nifty and even made hectic purchases in cash with a focus on IT majors such as Infosys, TCS, Satyam Computer and Wipro.
Domestic funds were also believed to be heavy buyers in blue chip stocks. Foreign institutional investors (FIIs), however, have drastically slowed down their inflows.
The Sensex had fallen by 352 points or 3.04 per cent in high volatility, adjusting to a healthy correction last week following a huge pull out by FIIs, who reported a net sales of over Rs. 7,000 crore in futures so far in April and Rs. 1206.5 crore in cash on April 10 and 12.
Metal stocks too attracted hectic buying interest on the back of sustained firm trend on LME. Gujarat Ambuja Cement, HDFC and UTI Bank also announced encouraging results. The growth in net profit of GA Cement was far higher than market projections.
The volume of business was low at Rs. 3,870.31 crore against Rs. 5,826.67 crore. Infosys clocked the highest turnover of Rs. 207.23 crore followed by Satyam Computer (Rs. 167.52 crore) and Tata Steel (Rs. 123.39 crore PTI