The first eight trading days of December have seen a sharp jump in average volumes in 30 shares of the BSE Sensex. An average of 3.65 crore shares were traded per day during this period as compared to 2.76 crore shares in the month of November. Against this, October witnessed an average daily volume of mere 1.61 crore shares. On November 28, 30 Sensex shares clocked the highest volume of 5.88 crore, taking the Sensex past the psychological barrier of 4000-mark.

During the calender 2000, December clocked the highest average daily volumes including the first quarter of this calender when the Sensex touched the roof, scaling past the 6000-level. The first week of December saw domestic mutual funds picking up large positions in the market. These funds were sitting on huge cash reserves in November, according to a fund analyst.Earlier in the year, January saw an average trading volume of 3.08 crore shares and February 2.52 crore shares. The sharp upsurge in volumes and prices during the first quarter of this year was led by new economy stocks.After ICE stocks hit the roof, there was rampant profit-booking at these counters. Since then, Sensex volumes have been dwindling. The month of October, however, saw the activity picking up in old-economy counters, riding the merger and acquisition wave.

"Old economy stocks were grossly undervalued. After hitting the rock-bottom, tech stocks have also turned attractive. Hence, the market is currently witnessing value investing," according to a broker. Another major driver of activity is market expectation on the government disinvestment front.

According to brokers, sectors like cement, paper, banks, technology and pharma are attracting buying interest and the trend is expected to continue. "Tech stocks are back in focus while select banking stocks will continue to witness heightened activity. World-over, banks are consolidating and India is no exception," said a noted Delhi-based broker. However, FMCG may remain subdued, he added.

Also, one of the interesting development is that retail investors are seemingly coming back to the market. The pressure on India's balance of payment may reduce as oil prices have come down to around $28 per barrel. It has come at the right time since December normally witnesses higher consumption, felt brokers.

Also, India's `food-for-oil' deal with Iraq is a positive development as the country can swap its buffer stock of food grains for crude oil.During the November-December period, some of the domestic institutions and foreign funds have seen churning their portfolios. "Foreign funds always take a contrarian view to the domestic funds. FIIs sold early in November and have since been exiting whenever there is a spurt in some counters. However, they have not been large sellers. So, redemption pressure is not a worry," said broker. u