Optimism about second quarter earnings boosts sentiment
MUMBAI: The Bombay Stock Exchange benchmark index, Sensex, and the 50-share Nifty of the National Stock Exchange on Tuesday closed at 16-month highs by adding 145 points and 45 points, respectively on growing optimism about second quarter earnings by corporates amid firming European markets.
Extending the winning streak for the fifth day in a row, the 30-share Sensex on the BSE gained 145.13 points to close at a fresh 16-month high of 16886.43.
During intra-day, it had surged pretty close to 17000, another psychologically important level.
The Nifty also closed past the crucial 5000-mark mark for the first time after May 22, 2008, on hectic short-covering in derivatives ahead of the expiry of September contract on Thursday. Marketmen said promising growth in advance corporate tax payments for the second quarter has fuelled expectations of robust second quarter earnings by India Inc. The market sentiment was boosted by a firm start in U.S. index futures and European markets.
Reports that market regulator Securities and Exchange Board of India (SEBI) was planning to relax norms for governing foreign portfolio investment also boosted sentiment.
Analysts said the growth in advance tax payments clearly showed revival of economic activity which was helped by stimulus of lower taxes and cut in interest rates.
Hightech Securities director Sanjeev Bhambri said the market was technically strong but investors had to be careful as valuations seem stretched. The Nifty closed at 5020.20, netting a rise of 44.15 points over its previous close.
The market was also heartened by a statement by Finance Minister Pranab Mukherjee last week-end about continuation of government’s economic stimuli injection till there was visible signs of clear recovery across recession-hit U.S. and Europe.
Rupee breaches 48
The rupee gained 18 paise against the dollar on Tuesday and closed below the 48-mark at 47.95/96 on persistent capital inflows from foreign funds and weakness of dollar in overseas.
It closed at 48.14 last Friday. Monday was a holiday. Foreign Institutional Investors have pumped in about Rs. 6,471.28 crore during last week in the equity markets.
In active trading at the interbank foreign exchange market, the local unit resumed strong at 48.10/12 and firmed up further to finish at 47.95/96 per dollar against Friday’s close showing a gain of 18 paise. — PTI