Indian shares touch new record high
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Indian shares touch new record high

Wednesday, 29 December 2004, 08:00 Hrs
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MUMBAI: Sustained large-scale overseas fund inflows into the domestic stock trading ring propelled India's benchmark share market index to a new all-time high Tuesday.

Dealers said the stock market opened for the day on a positive note as investors picked up shares of refining and other heavyweight old economy companies on lower crude oil prices in the global market.

The institutional buying activity continued for the better part of the trading session on sustained inflows of funds by domestic and foreign institutional investors.

The stock market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed at 6,563.48, netting a gain of 50.45 points or 0.77 percent over its previous session's close.

The benchmark market index bettered its all-time closing high of 6,513.03 touched Monday.

Hopes of robust economic growth and corporate profits in the current fiscal are encouraging foreign funds to increase their allotment for this market. Many new overseas funds are exploring the possibility of investing in India.

Foreign funds have collectively put a record over $8.5 billion in the Indian capital market in the current calendar year, up from $6.5 billion in inflows in the corresponding period of the previous year.

A slew of overseas fund managers are looking to make their fortune in India as Asia's fourth largest economy sheds its decades of casino like stock trading practices in favour of world-class regulatory systems.

Adoption of stringent corporate governance norms by companies and easier investment guidelines are helping foreign institutional investors to loosen their purse strings in India.

India's economy is projected to expand by 6.5 percent in the current fiscal year ending March 31, 2005.

Though the projections are lower than previous year's 8.2 percent growth, experts say India would continue to rank in the list of the fastest growing economies globally.

In the old economy sector, Tata Steel, India's second largest steel-maker, gained 4.5 percent to touch 390.95 on hopes that the company would post robust corporate results in the October-December quarter.

Shares of Reliance Industries, India's largest private business group, rose 2.2 percent to 528.10 on fresh institutional buying interest after ending 1.3 percent lower in the previous session.

The Reliance Industries board Monday approved an ambitious share buy-back programme to curb volatility and speculative trading on the counters.

But in a clear signal that the proxy war between the Ambani brothers, who controls the conglomerate, is far from over, Reliance Industries vice chairman Anil Ambani abstained from voting on the buy-back.

Index heavyweights such as State Bank of India ended nearly two percent higher at 625.15, and tobacco giant ITC was up 0.7 percent at 1,318.25.



Source: IANS
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