Sensex scales 20,000-peak after 32 months

Upbeat foreign investors on Tuesday pushed the Bombay Stock Exchangebenchmark Sensex above the 20,000 points-mark for the first time in 32months, as they bet on companies that are driving the Indian growthstory.

The barometer closed 95.45 points, or 0.48 per cent, upat 20,001.55 - its best since January 15, 2008, when the index ended at20,251.09 points.

Similarly, the 50-share National StockExchange benchmark Nifty breached the psychological 6,000-mark andended at 6,009.05, up 28.6 points, or 0.48 per cent.

Somebrokers, however, feel a short-term correction may be round the corner,but would nonetheless provide good investment opportunities.

Happywith the market milestone, Finance Minister Pranab Mukherjee toldreporters in New Delhi: "We all know the Sensex is always a little bitunpredictable. (But) I am happy that for the first time after January2008, it has crossed 20,000."

Analysts said the rally in Indianmarket is propelled by strong inflows from overseas fund houses, whichhave made a net investment of over Rs 71,000 crore in local stocks sofar, in this year.

"Sensex gushing past 20,000-mark standstestimony to the attractiveness of India as a preferred investmentdestination. With Indian economy structurally well placed for an 8 to 9per cent gross domestic product growth over a long period, domesticequities are in a structural bull run," Angel Broking CMD DineshThakkar said.

Tuesday's close marked the third straight session of gains.

Significantly, the Sensex has completed its journey from 17,971 points on August 31 to 20,000 in just 15 trading days.

Tuesday's gain was fuelled by a smart gain in blue-chips like Larsen & Toubro, HDFC, HDFC Bank, TCS, Infosys and BHEL.

Infosysrose 0.9 per cent, TCS 2.5 per cent and Wipro 2.7 per cent. Equityanalysts said IT stocks rose after IBM Corp announced a $1.7-billiontakeover.

L&T zoomed 2 per cent, Cipla 1.92 per cent andBHEL 1.73 per cent. With a net gain of 2.93 per cent, Tata Power wasthe best performer in the Sensex pack.

In the BSE-30 pack, 16 stocks ended with gain, while the rest closed in the red.

Even in the broader market, 2,123 stocks declined against 883 advances.

RelianceIndustries Ltd, which holds the maximum weight in the Sensex, acted asa drag, closing 0.60 per cent lower at Rs 1,033.5.

ITC plunged2.58 per cent and led the losers' pack. Other major losers includeJaiprakash Associates (1.52 per cent), DLF (1.38 per cent) and Hindalco(1.22 per cent).

Asian stocks rose after US homebuilder LennarCorp posted better-than-estimated profit, boosting optimism in theeconomic recovery worldwide.

US stocks advanced on Monday,sending the S&P 500 Index to a four-month high on Lennar Corp'sprofit forecasts and IBM Corp announcing a $1.7-billion takeover.

Sensex extended gains ahead of the US Federal Open Market Committee meet tonight. The upswing was led by the IT, telecom and capital goods stocks.

Triple digit gains in the US and strong rebound in the European markets acted as sentiment booster, brokers said.

"It would be wise to be a bit cautious at this stage, as the recent surge has been a little too fast (though not as fast as November 2007) and therefore calls for some consolidation," a broker said.