Sensex surges 136 points to a 30-month high

Brisk buying by FIIs buoys market mood

Sensex surges 136 points to a 30-month high

While the popular Sensex at BSE closed above the 18,000 level, the broad-based Nifty of NSE eventually broke 5,350-5,400 range to close at 5,442 this day, which is the highest closing since February 2008.

The market surged for second straight day following decent Q1 earnings and sustained foreign fund buying which boosted investor sentiment in Dalal Street. Analysts view that although this day’s rally looks like a breakout on the upside but it should sustain for some trading sessions and strive for the next target of 5,550-5,600.

Analysts said the Sensex, which was in the negative zone till mid-session, reversed the trend in the final hours of trade as better-than-expected European economic data ignited buying here, pushing the index to a high of 18,127.90, up 150 points. The sentiment on Dalal Street was weak in early trade following a steep overnight fall in US markets.
However, it turned bullish after the positive opening of European bourses and the firm start of US futures, market experts said.

Investors also responded positively to news that food inflation declined to 12.47 per cent for the week ended July 10 from 12.81 per cent in the previous week, they said.

“I am hopeful that the market will sustain this level and, in fact, will rise further in coming sessions,” an analyst said.

“Our domestic fundamentals are strong and I hope markets will sustain the gains in the near-term,”said another.

The barometer index of BSE crossed the psychological 18,000 mark, with auto, metal and banking stocks leading the rally and market breadth was positive except for BSE IT index. Foreign funds bought equities worth Rs 174.68 crore during the day, while domestic funds dumped shares worth Rs 512.19 crore.

Stocks drifted lower at the onset of trading session on weak global cues but moved into positive zone mid-afternoon as European stocks and US index futures surged. The market extended gains in late trade to strike fresh intraday highs. Experts foresee volatility rising over next few days as traders rollover positions in derivatives segment from July 2010 series to August 2010 series ahead of the expiry of near-month July 2010 contracts next Thursday, July 29, 2010.

Accordingly, BSE 30-share Sensex surged 135.92 points or 0.76 per cent to close at 18,113.15, which is its highest closing since February 2008. The index rose 150.67 points at the day’s high and lost 97.35 points at the day’s low in morning trade.

The S&P CNX Nifty rose 42.60 points or 0.79 per cent to settle at 5,441.95 points, its highest closing since February 5, 2008. The BSE Mid-Cap index rose 0.41 per cent and BSE Small-Cap index rose 0.27 per cent. Both indices underperformed the Sensex.

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