BULLS ARE BACK Sensex hits 6-mth high, gains 194 pts

Mumbai: The sensex gained further on Friday, ending 194 points higher at 11,329—its highest closing in six months. The day’s gains also ensured the seventh week of gains for the index as investors got richer by Rs 54,000 crore with BSE’s market capitalisation now at almost Rs 36 lakh crore.
The day’s rally piggybacked on strong FII-buying, with a provisional net buying figure of Rs 577 crore. Domestic funds had net buying of Rs 15 crore. The day’s rise was led by banking stocks, along with those from sectors like consumer durables, capital goods and technology.
Institutional dealers said that although fundamentals of the economy had not changed much, it is the liquidity—availability of funds—with institutions that is driving the current rally. So on the flip side, they warn that if for any reason the liquidity flow reverses, the market could go for a speedy slide.
Market players said that with the index closing near the day’s high and US market in early trading showing good gains, Monday’s session could witness some more rise from the current levels. Next week’s trading will be truncated with trading on Thursday closed for the Lok Sabha elections in Mumbai and closed on Friday for Maharashtra Day. In the shortened week, the index could further its gains to the eighth consecutive week, market players said.
Market players also said that in case the election result throws up a more fractured mandate with a large number of political parties and no clear mandate, the economic slowdown could worsen and bring the market down. The results for the ensuing election is set to be announced in less than four weeks from now. Till the poll results are out, brokers advise caution to investors.
On Friday, among sensex stocks, M&M ended 7% higher at 474, Jaiprakash Associates closed 6.1% higher at Rs 126, while Grasim gained 5.7% to Rs 1,802. Among losers were Ranbaxy Labs, which announced its largest quarterly loss of Rs 778 crore, ended 2.4% off at Rs 176 and HUL lost less than 1% to end at Rs 238. On BSE, there were 1,536 advances, compared to 970 laggards.