Sensex ends above 19000 on big reforms
By ENS Economic Bureau - NEW DELHI
05th October 2012 10:10 AM
Buoyed by hopes of the government unleashing a second wave of big-ticket reforms in insurance and pensions sectors, stock markets rallied strongly on Thursday with the Sensex crossing the 19,000-level for the first time in over 15 months.
Strong buying by foreign institutional investors coupled with a buoyant sentiment on the back of government’s much-anticipated decision to raise foreign direct investment cap in insurance sector to 49 per cent from the current 26 per cent and reforms in pensions sector saw the 30-share Sensex closing at 19,058.15 points, a gain of 1 per cent. Similarly, the 50-share Nifty ended the day at a 17-month high of 5,787.60 points, its highest close since April 27, 2011.
With markets posting strong gains in September after the government had allowed foreign direct investment upto 51 per cent in multi-brand retail and gave a green signal to foreign carriers to acquire upto 49% stake in Indian airlines, going forward analysts feel the momentum is going to continue. In September alone, foreign funds net bought nearly $ 4 billion of Indian stocks, taking the cumulative tally for 2012 so far to around $16 billion.
“The Sensex has closed above 19,000 for the first time since July mainly on the wave of positive sentiment due to the reforms announced by the government. Liquidity infused by FIIs through consistent buying in the past few sessions has also played a part. We believe that a level of 20,000 is likely by December if reform announcements continue,” said K. Subramanyam, AVP-Institutional Research, Asit C. Mehta Investment Intermediates Ltd. Shares of companies with exposure to insurance business such as Aditya Birla Nuvo, Max India and Reliance Capital posted gains of 5 per cent. Among Sensex stocks, BHEL was one of the biggest gainers.
Meanwhile, the rupee rallied for a fifth consecutive session on Thursday to close at a five-and-half month high against the dollar. It ended at 51.74, up 41.5 paise against Wednesday’s close of 52.1550/1650. The Indian currency hit an intra-day high of 51.67, breaching 52 to the dollar for the first time after April 20.
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