Sensex breaches 10k on strong global, local cues

Written by Markets Bureau | Mumbai | Updated: Mar 28 2009, 04:58am hrs
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It was again 10,000 at the Bombay Stock Exchange on Thursday, as low inflation (0.27 %), strong Asian cues-Zhou Xiaochuan, chairman of the Chinese central bank, Peoples Bank of China, said that his economy was on the recovery pathand assurances from RBI governor D Subbarao that Indian economy, too, was poised to do well, lifted buying. Foreign institutional investors have made net purchases of $1.3 billion in the past three trading sessions. As a result, the rupee too rose 0.3% to 50.60 per dollar.

For the first time since September 2008, when the global crisis broke out, volumes on the National Stock Exchange crossed the 15,000-crore mark. A higher volume of trading means more interest among buyers and sellers to invest in the stock market. The 50 share S&P CNX Nifty also touched 3,100 points. The last time both indices had touched these marks was on January 7, 2009. While the cues were positive, hectic short covering at the end of the March series contracts also catalysed the movement.

Globally stock markets in the US and EU were upbeat about Barack Obamas new plan to clean the US financial system of toxic assets. This includes treasury secretary Timothy Geithners proposal to ask the Congress for powers to seize and wind down any financial company big enough to destabilise the banking system, as part of a revamp of financial rules in America.

Taking these cues, MSCI Emerging Markets Index rose 1.8% to touch 597.37. The monthly gains are now at 20%, and the March rally is the biggest since the benchmark was created in December 1987. This is also double the 10.7% increase in the MSCI World index of stocks in developed nations.

The rally has been much stronger, with greater volumes and greater participation by market players, with FIIs and MFs pumping in over Rs 2,000 crore and Rs 1,300 crore, respectively, said Dinesh Thakkar CMD, Angel Broking.

Eventually, the Sensex added 335.20 points or 3.47% to close at 10,003.10 points. The Nifty gained 97.90 points or 3.28% to end the day at 3,082.25 points.