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Sensex gives 27,000 salute as PM Narendra Modi hits ton

Wednesday, 3 September 2014 - 7:35am IST | Place: Mumbai | Agency: dna
Index gains 151 points to first time cross and close at 27019 on the day when NDA government completed 100 days; experts see 3-4% correction in near future

Buoyed by Japan committing investment of $35 billion in India, markets on Tuesday continued with their spree of crossing new milestones on the back of heavy buying by foreign investors.

On the day the NDA government completed 100 days, Sensex broke the psychological barrier of 27000 to close at 27019, a gain of 151.84 points, or 0.57%, from the previous close. Nifty too hit a new high of 8083.05, gaining 55.35 points, or 0.69%, at the day's close.

Tuesday gains was the third consecutive record high logged by the markets.

Dealers said the sentiment got a boost after Japan having committed to invest $35 billion over the next five years in infrastructure.

Besides, news of Australian Prime Minister Tony Abott visit to India on Thursday and his support towards supplying uranium to the country are among the factors factored in by the bulls.

"After Japan's commitment to invest $35 billion, most are expecting the Australian uranium supplies to be streamlined and hope to get similar commitments from Abott for defence sector," said Arun Kejriwal of Kejriwal Research.

Cement and pharma stocks gained the most.

"Buoyant Asian markets, a 16% year-on-year growth in domestic cement sales and a shrinking current account deficit pepped up the sentiment," said G Chokalingam of Equinomics Research Advisory Services.

Of the 50 stocks on the Nifty, 34 gained, 15 were losers, while one remained unchanged.

Top gainer was Cipla which closed 5.38% higher from the previous close at Rs 557.60 followed by Bharati Airtel, up 4.31% at Rs 392, Grasim Rs 3,607.30 (3.82%), Ambuja Cements Rs 216.05 (3.65%) and ACC Rs 1553.95 (3.63%).

Dealers said overall the markets were on an uptrend but intermittent profit-taking could bring down the indices. "Those who have missed the rally will now join the bandwagon and one could see them being hit at higher levels when the correction occurs," said a dealer at a brokerage.

"It's best to wait for a correction to enter the market," he said.

A few said retracements were likely as the Sensex gained just 152 points, or 0.57%.

"With the psychological barrier having being breached one can expect a sharp correction of 3-4% in the near future," said Kejriwal.

This, however, does not imply that the markets could turn bearish, said market participants.

"With India forging political alliances with Japan, Australia and the US, the tone has indeed changed and been positive for the economy. The bullish tone, however, remain structurally intact," said Chokalingam.

Asian indices gained. Nikkei was up 1.24% at 15668.60, while Hang Seng fell 3.07 points.

In early trades, Nasdaq was trading 0.13% at 5741, while S&P 500 was in the red at 1999.20 (-.0.20%). In late trades, Nifty on the Singapore exchange was still trading higher by 48 points at 8125.




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