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Sensex ends at new closing high of 6194.1
By siliconindia
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Wednesday, 14 January 2004, 20:30 IST
MUMBAI: Indian shares jumped one per cent to hit a new closing high Wednesday on keen buying by foreign and local funds lured by prospects of strong growth in Asia's third-largest economy, dealers said.
The Bombay Stock Exchange's benchmark 30-share Sensex index leapt 61.14 points to end the day at 6,194.11.
Gains were led by giant State Bank of India, the country's largest commercial bank, which touched an all-time high as investors bought into the sector on hopes of a decline in bad loans thanks to a strengthening economy, dealers said.
Other old economy stocks also saw good buying from funds and retail investors, dealers said.
"Retail participation is increasing steadily as the fancy for the market is rising day by day," said equity analyst Prakash Lala. "Investors are shifting from debt funds to equity funds given market awareness in the country now."
Low debt fund returns due to a falling interest rate climate were making more retail investors switch to equities which have been on a bull run since last May.
Sentiment has also been buoyed by expectations of a strong quarterly earnings season.
The Sensex, the country's most closely tracked index, soared 73 per cent in 2003 led by large investments by foreign funds drawn by robust economic growth.
India's economy grew by a blistering 8.4 per cent in the second quarter and economic planners have forecast it will post nine per cent growth in the second half of the year to March 2004.
"The reason is the same but fund inflow is steady and strong," another dealer with a foreign brokerage said. "Global investors have definitely bought the India story and that is what is keeping the momentum going," he said.
State Bank closed up Rs 28.65 rupees at Rs 674.50, power stock Tata Power rose Rs 12.70 to Rs 422.80, software major Satyam Computer climbed Rs 8 to Rs 362.55, cigarette major ITC rose Rs 36.90 to Rs 1,135.15 and cement share Gujarat Ambuja advanced Rs 15.10 to Rs 327.60.
(Source: Agence France-Presse)