Sensex gains 140 pts on sustained FII inflows

Stock markets remained buoyant for the sixth consecutive session on Tuesday, with the Bombay Stock Exchange benchmark Sensex rising nearly 140 points to a fresh 32-month high as foreign institutional investors (FIIs) continued to bet big on India.

After regaining the 19,000-level on Monday, the BSE's 30-share barometer ended the day 138.63 points higher, or 0.72 per cent, at 19,346.96. Its previous best close was 19,700.82 on January 17, 2008.

Similarly, the wide-based 50-share Nifty index of the National Stock Exchange added 0.62 per cent to end near the 5,800-level. The index finished the day at 5,795.55.

At one point of time during Tuesday, the Sensex hit a high of 19,487. Marketmen attributed the rise to foreign institutional investors pumping in funds, as they remained bullish on the India growth story, especially after 13.8 per cent growth in industrial output in July.

With today's gains, markets have gained over 20 per cent since the last week of May. Discarding the possibility of profit-booking at higher levels, brokers said markets would continue to rise.

"This is a liquidity-supported rally and we hope the bull run would continue for sometime," Edelweiss Capital Head of Institutional Equities Vikas Khemani said.

Markets discarded inflation falling to 8.5 per cent in August. Analysts, however, said all eyes are now on the Reserve Bank India's mid-quarter review of monetary policy on Thursday. The apex bank's stance on interest rates in view of high inflation would direct the market, they added.

Advance tax collection numbers are another indicator that could impact the sentiment, they said.

In terms of sectors, consumer durables, information technology and auto were by far the biggest winners. Select capital goods, fast-moving consumer goods, oil & gas, PSU and banking indices also gained on BSE. However, profit-booking at metal, realty and power counters pared some of the gains.

IT major Wipro zoomed 3.6 per cent and was the top gainer in the Sensex pack. Other peers also participated in rally, with Infosys rising 1.38 per cent and TCS 1.65 per cent.

Analysts said a forecast for faster European economic growth boosted confidence and led the rally in IT stocks.

Among frontline banking stocks, HDFC Bank jumped 2.33 per cent, HDFC 1.27 per cent and ICICI Bank 0.27 per cent. SBI, which had gained over 5 per cent in the previous session, saw some profit-booking and ended 1 per cent lower.

In the auto segment, Tata Motors gained 2.73 per cent, Maruti 1.5 per cent and M&M 1.44 per cent.

Bharti Airtel also rose 2.12 per cent and Jaiprakash Associates 3.31 per cent. Furthermore, L&T advanced nearly 1 per cent.

In the 30-BSE index components, 19 stocks closed with gains, while 11 ended in the negative zone.

Reliance Industries Ltd, which holds the maximum weight in the Sensex, lagged behind and ended 0.45 per cent lower at Rs 987.75. On Monday, the energy major had gained about 3.5 per cent.

Metal major Sterlite Industires rose 2.68 per cent, but its peers, Hindalco and Tata Steel, ended in the red. Hindalco led the losers pack and ended nearly 2 per cent down.

Other major losers included ACC, which declined 1.91 per cent, Tata Power (down 0.76 per cent), Tata Steel (down 0.72 per cent) and NTPC (down 0.60 per cent).

The market breadth was negative as small-caps and mid-caps lost ground. However, trading volumes and turnover was on an upswing, underscoring the current positive momentum in the market.

On the global front, Asian stocks ended narrowly mixed.

The key indices in Japan, Singapore and Kospi ended lower 0.24 per cent to 0.59 per cent, while bourses in China, Hong Kong and Taiwan inched up 0.01 per cent to 0.51 per cent.

After registering initial gains, European shares fell back in late morning deals ahead of the release of key data by Germany and the United States, which is likely to indicate the pace of economic recovery. Key indices in the UK, France and Germany were down 0.19 per cent to 0.36 per cent.