Bulls ride global wave; Sensex reclaims 18K

Saturday, January 26, 2008

Bulls ride global wave; Sensex reclaims 18K

Source: The Economic Times

After a day's pause, the bulls were back in action on Friday riding a global rally after the Bush administration announced an economic stimulus plan aimed at stemming mortgage-market losses in the US. Realty shares were frontrunners, followed by the banking pack.

Japan's Nikkei ended 4.10 per cent higher, Hong Kong's Hang Seng gained 6.73 per cent and Singapore's Straits Times was up 3.59 per cent.

National Stock Exchange's Nifty closed 6.95 per cent or 350 points higher at 5383.35. It touched a high of 5399.25 and low of 5035.05 intraday.

Bombay Stock Exchange's Sensex ended at 18,361.66, higher by 6.62 per cent or 1,139.92 points from Thursday's close. The index soared to a high of 18,406.25 from a low of 17,504.00.

According to Satish Kannav, technical analyst at Arihant Capital, 18,300 is a key resistance for the Sensex. And given past history, the 30-share index will not be able to sustain above this level, he said, hinting at yet another correction.

In the market crash of May 2004 and May 2006, indices were unable to overcome 38 per cent retracement levels of the fall. This time around, 38 per cent of the recent crash on the Sensex stands at 18300, which it managed to surmount today.

"Despite the fall, the Sensex has been able to sustain above the 200-day moving average (16625-30 levels). Therefore, before the F&O expiry for the January series which is underway, one can expect a correction from current levels, with 16,625 being the support. Index heavyweight Reliance Industries specially looks weak, so one should watch out for the counter," said Kannav.

In wake of the nationwide bank strike, no funds transfer was possible today leading to a situation where brokers did not accept fresh orders from clients. This affected volumes. Today traded volume on NSE stood at Rs 13,402.87 crore against Rs 17,209.5 crore on Thursday.

Among the large-caps, Hindalco Industries (up 14.01%), Reliance Energy (11.81%), ICICI Bank (11.16%), L&T (9.95%), NTPC (9.11%) and Bajaj Auto (9.02%) posted handsome gains.

In sectors, BSE Realty Index gained 10.4 per cent on the back of massive gains in Unitech (up 17.79%), Indiabulls Real Estate (13.75%), HDIL (13.71%) and Parsvnath Developers (8.95%).

Banking shares soared ahead of Reserve Bank of India's quarterly monetary policy review next week. The push came from index heavyweights ICICI Bank (up 11.16%) and State Bank of India (3.18%), driving the BSE Bankex Index up 7.53 per cent to 11,379.77. Axis Bank (9.2%), Punjab National Bank (7.63%) and Bank of India (8.44%) lent support.

This was after India’s wholesale price index inflation rate came on expected lines, rising 3.83 per cent in the week to Jan 12 from previous week's 3.79 per cent rise.

Sentiment also got a boost from an extended rally in Europe, where London's FTSE gained 1.16 per cent, Germany's DAX was up 1.99 per cent and France's CAC 40 rose 1.27 per cent.

Institutional players also were averaging out their positions, especially in the midcap space, in an attempt to make up for the losses suffered in the crash. This saw the BSE Mid-cap Index and CNX Mid-cap end 6.85 per cent and 8.27 per cent higher, respectively.

According to provisional data on both the exchanges, foreign funds Friday bought Rs 208.48 crore of shares against net sales of Rs 2,255 crore on Thursday.

Brigade (up 29.97%), Bajaj Hindusthan (29.45%), Balrampur Chini (24.53%), Adlabs Films (22.18%) and Chambal Fertilisers (19.91%) were the biggest mid-cap gainers.

Market breadth on BSE showed 1,558 advances and 1,162 declines, while on NSE, 930 shares gained and 294 fell.

Great :) Market is coming up as told by experts. But how long? As it was a Friday, we can expect a Monday boom on 28.

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