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Sensex sees another bull-run
By siliconindia
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Friday, 15 December 2006, 18:30 IST
Mumbai: The Sensex, in the news for the past few days for its dramatic tanking, has seen an equally dramatic turnaround. On Thursday, the bulls intensified their onslaught, lifting benchmark equity indices by over 2 percent. With this rise, the 30-share Sensex has gained around 491 points in the last two sessions of Thursday and recouped half the losses suffered between last Friday and this Tuesday.
But the question that seems to the doing the rounds is: Will the good times last? And for how long? It is felt that higher tax outgo - meaning "better corporate earnings " - could sustain the party.
Foreign portfolio managers are absolutely unperturbed by the gyrations though; FIIs have one again stepped in to buy. The market operators, unwilling to believe a quick turnaround, are reluctant to build major long positions, while the day traders, many of whom have become bundle of nerves, are playing with unusual caution. The Economic Times reported this today.
The bears, were once again on the back foot. The Sensex surged 305 points to close at 13487, while S&P CNX Nifty gained 77 points to close at 3852 on Thursday. Foreign funds were the active buyers, accounting for over Rs 480 crore worth of shares buying at the net level, as per provisional numbers on the NSE.
Dealers said mainly the squaring up of sell positions in the derivatives segment had driven the rally.
After the industrial output data turned out a damp squib on Tuesday, the market is now eyeing the third installment of advance tax payment by corporates, due on December 15. The advance payment will provide an outline of Q3 corporate results, brokers told the ET. This is crucial since the current rally is thought to be driven by expectations that corporates will be able to sustain the strong growth in earnings seen over the last three years.
The RBI is widely expected to refrain from raising interest rates at its policy meeting to be held on December 18-19, while the US Federal Reserve kept interest rates unchanged on Tuesday for the fourth consecutive time.