Sept. 9: Powered by the positive opening of the European markets, the Sensex perked up after a see-saw morning trade and closed at 18,799.66 — the highest close since January 18, 2008 when it closed at 19,013. The Nifty closed at its resistance level of 5640.05, up 32.20 points.
Bank stocks were the stars followed by auto on a day that saw an almost equal number of stocks close in the green (662) as in the red (619 stocks). State Bank of India — the country’s largest bank — and HDFC Bank hit new highs and closed at Rs 2,994.70 and Rs 2,250 respectively. The largest private lender in the country, ICICI Bank, was up Rs 15.40 at Rs 1,054.00. Other banks also made 52-week highs.
September 2010 is different from January 2008 when there was euphoria and what was described as an irrational exuberance in the stock markets globally.
Between 2003-08 the markets had given returns of 40-50 per cent. On January 10, 2008, the market had hit a high of 21,206 and then on January 21, it plunged to 17,600 and the following day to 15,300 as the global financial crisis deepened.
There is no fear of a repeat of this catastrophe now, said Mr Pradip Hotchandani of Anagram Securities. “The mood is sceptical and almost fearful now,” he said. The market can go up another 100 points and the Nifty can achieve 5,740-5,750 in the next couple of days.
Foreign liquidity is driving the markets, which outperformed the Asia markets. “This inflow will continue but there will definitely be some profit booking and correction,” said Mr Sudip Bandyopadhyay of Convexity Solutions.
Foreign institutional inve-stors (FIIs) pumped in $100 million on Wednesday, Mr Bandyopadhyay said.
Mr Ranjit Kapadia of HDFC Securities agrees that FII inflows are fuelling the markets that could go up by six per cent from here to 20,000 by Diwali. “There will be some corrections before that,” he added.