Stock markets opened the new year on a promising note with the BSE benchmark Sensex advancing 52 points today, the first session of 2011, as foreign funds bought scrips on the expectations of high corporate earnings.
The Bombay Stock Exchange benchmark Sensex, which had gained 483 points in previous three sessions, in the last year, rose further by 51.96 points to settle at 20,561.05 led by stocks of metal and consumer durable sectors.
The Sensex touched the day’s high of 20,664.80 as initial upsurge was supported by the auto sector, on reports of higher sales, but profit-selling reduced the gains.
The broad-based National Stock Exchange index Nifty rose by 23.10 points to 6,157.60, after touching the day’s high of 6,178.55.
Brokers said two years of gains and a higher start today placed the benchmark as the best performer among the leading 10 world equity markets.
The index gained 17.43 per cent last year, extending its historic 82 per cent rally in 2009 on faster recovery in the economy.
They said in the current attractive market, companies on the measure valued at an average 19.4 times estimated earnings compared with its peak of 20.1 times on November 5.
Besides, foreign fund inflow that was up 61 per cent last year would further make the gauge most expensive in Asia and among the BRIC markets - including Brazil, Russia and China, once they are completely back to their offices next week.
The current rally was mostly attributed to metal segment stocks, on rising demand and hike in base metal prices led by copper in the overseas markets.
A spurt in the auto sector following attractive sale figures, also indirectly influenced trading sentiment in metal stocks, a major user of base metals.
Tata Steel, a biggest producer of the alloy, shot up by 3,60 per cent to Rs. 703.40. Sterlite Industries shot up by 3.05 per cent to Rs. 192.30, its highest close since May as Copper rose to a record in New York on speculation that supply will lag behind demand as the global economic recovering.
Hindustan Zinc, a largest zinc producer rose by 0.82 per cent to Rs. 1,378.40. The company raised zinc prices by 1.3 per cent from today.
The metal sector index gained the most by 2.07 per cent to 17,959.50 followed by consumer durable index by 1.54 per cent to 6,454.64. Banking index rose by 0.56 per cent to 13,454.28 on expectations the better economic growth would boost demand for loans.
The Sensex has climbed every quarter since May 2009, when the Congress party won its biggest electoral victory in two decades, on pledge to cut fiscal deficit and boost economic growth.
