Sensex journey from 7,000 to 20,000!
We bring to you the ET coverage on the milestones that the Sensex crossed, right from the day it touched the 7000 mark in 2005, till date.
January 8, 2008 Sexsex scales 21000 mark Markets on Tuesday opened at a strong note with Sensex touching 21000 mark in the opening trade for the first time.
October 29, 2007 Sensex crosses another milestone Age ain’t anything but a number’ went the title of a popular number in the nineties. Years later, the song echoed on Dalal Street as the Sensex tore past the psychological 20,000 mark towards the fag end of Monday’s session. It took the index a little over 20 years to reach the first 10,000 mark, but just a little over 20 months to double that score. The market may have turned riskier, messy politics could resurface, and oil prices are at a new high; but nothing seems to worry local investors, who feel the index can go up further.
While the mood on Dalal Street is celebratory, even the most diehard bulls are baffled by the ongoing frenzy. “Nothing has changed really,” says Rare Enterprises partner Rakesh Jhunjhunwala, who has been maintaining a bullish view for sometime now. Significantly, it’s the local institutions who are in the driver’s seat. As per BSE data, foreign funds have net sold over Rs 1,100 crore worth of shares over the last three trading sessions while local funds have net bought over Rs 2,300 crore worth of shares. Sceptics point to the fact that it is only a handful of stocks that is driving the market higher. Capital goods shares set the stage for the occasion as the Sensex vaulted to a fresh peak of 20,024.87 before settling at a closing high of 19,977.67, up 734.50 points, or nearly 4%, compared to the previous close. The 50-share Nifty hit a new high of 5,922.50 and went on to end the day at 5,905.90, up 203.60 points. According to Kotak Mahindra Bank CEO Uday Kotak, most foreign entities are reluctant to sell their P-notes , fearing they may not get a chance to buy back. He also felt that some Chinese money may be entering India through FIIs. Sections said the absence of big selling by FIIs has prompted domestic momentum players to buy, which along with some short covering has pushed the Sensex up. But what’s worrying some is that the market breadth on Monday was less than emphatic, with four stocks ending down for every five that rose. And concerns about valuations persist, though some players feel the old valuation parameters may no longer be applicable. “Valuations look a little above the historical fair value,” says ICICI Prudential AMC chief investment officer Nilesh Shah. “However, compared to China, they look fairly reasonable. We are seeing a paradigm shift in valuation benchmarks,” he added. Traded turnover on both segments combined was around Rs 1 lakh crore, a shade lower than Friday’s. Capital goods shares were the star performers of the day, with frontline stocks like Larsen & Toubro and Bhel rising 10% and 7%, respectively. Banking shares surged ahead of the monetary policy announcement on Tuesday. Index heavyweight Reliance Industries ended 5% higher after touching a record high of Rs 2,844 intra-day. IT MAY BE A HEADY COCKTAIL Market-cap touches Rs 62,16,907 crore ($1.58 trillion) 207 stocks touch new life high Trading in 297 stocks frozen for want of sellers Third biggest single-day jump Decent Q2 earnings, 9.4% growth A 2% rise in the RIL stock price will make Mukesh Ambani the richest Indian in the world, overtaking LN Mittal BUT THERE ARE RIDDLES IN THE MARKET PLACE Despite Sebi ban on derivative-linked PNs, F&O outstanding is Rs 1 lakh crore. Why is there no unwinding? Are more investors hedging? FII flow has been erratic in the last few weeks. If this persists, will local MFs, big corporates and insurance firms continue to buy? While FIIs have been booking profits, there is no big selloff. Why? Hedge funds are holding on to PNs, fearing they may not get a chance to get back. How long will the PN charm last? Market is getting narrower, riskier. Fewer stocks driving Sensex. And leveraged positions ballooning.
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Source:ET