Sensex beats slump, hits all-time high

Sensex beats slump, hits all-time high

The country’s top market sprang a surprise on Friday, with Sensex touching a record high in the midst of prolonged economic slowdown.

The BSE index hit a high of 21,293.88 during the day, though it closed at 21,196.81. The previous record high was over five years ago, on January 10, 2008, when it touched 21,206.77.

However, NSE index, Nifty, did not reflect the Sensex rise. Nifty recorded 6,332.60 during the day,while the record high of 6,357 was witnessed on January 8, 2008.

The euphoria during the peak of the previous bull market in 2008 was missing this time and investors were cautious.

Profit taking pared much of the gains in late morning trades, as investors booked profits at higher levels in index heavyweights. Consequently, both major premium indices of the BSE and the NSE closed with modest gains.

Analysts maintain that the current rally, which has propelled the index to its all-time high, is driven by liquidity rather than earnings growth and retail participation being still low.

Foreign Institutional Investors (FIIs) have been aggressive buyers in Indian equities as they were net buyers for the 18th straight day during October. FIIs bought shares worth a net Rs 1,961.20 crore from the secondary equity markets on Thursday, as per Sebi data.  With this, they have pumped in more than Rs 86,000 crore in Indian stocks in calendar 2013.

Unlike in the last few sessions, midcap and small cap shares were in demand this day. However, the BSE midcap and small cap indices closed with a gain of 1.15 and 0.74 per cent to close at 6,177.40 and 5,939.60 points respectively.

They are still 40 per cent and 58 per cent away from their record highs seen in January 2008, and investors are betting that these stocks are attractively valued compared to their large cap counterparts which have had a fabulous run in the last couple of months.

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