Sensex soars 311 points; poised to breach 20,000 mark again

Moving closer to 20,000-point mark, stock market benchmark Sensex today rallied by 311.35 points to a 32-month record high of 19,906.10 points, as investors flocked to buy heavyweights like Reliance Industries, ITC and HDFC.

Another benchmark index Nifty of the National Stock Exchange also surged 103.55 points to 5,980.45 points, closing just shy of 6,000-point level.

Both the indices closed at their highest levels since January 15, 2008, while in intra-day trade they scaled their record peaks since January 17 in the same year.

The Sensex hit an intra-day high of 19,927.30 points, while Nifty peaked at 5,989.50 during the day.

The Sensex and Nifty had last traded above 20,000 and 6,000 points respectively on January 17, 2008.

Interestingly, the future contracts of Nifty for September and October have already crossed the 6,000 level.

Analysts said that the indices are all set to surpass these psychologically important levels in early morning trade tomorrow, unless there are some unexpected negative global cues once the US market opens later in the evening.

"The rate at which market is rallying, surpassing that level would not be a difficult task," Kotak Mahindra Old Mutual Life Insurance chief investment officer Sudhakar Shanbhag said.

Market experts attributed today's rally -- the second consecutive day of uptrend -- to continuing surge in foreign investment flows as also huge buying interest in blue-chips like Reliance Industries, ITC, L&T, Infosys as also financial sector majors like HDFC, HDFC Bank and ICICI Bank.

"The rally is fuelled by huge inflows from overseas fund houses as they see higher growth returns in emerging economies like India, where fundamentals are strong," Shanbhag added.

Betting big on the Indian equity markets, foreign fund houses have invested over Rs71,000 crore ($15.6 billion) so far this year and analysts believe that it will soon breach the record-figure of Rs83,400 crore achieved in 2009.

FIIs play a major role in stock market and their movement (inflow and outflow) causes fluctuation in benchmark indices.

RIL, which holds the maximum weight in the Sensex, surged 1.24% to close at Rs1,039.70. FMCG major ITC zoomed nearly 5%.

Banking stocks once again emerged as the favorite sector for FIIs and HDFC climbed 3.33%, HDFC Bank 1.92% and ICICI Bank 1.15%. SBI rose 0.44%.

IT bellwether Infosys rose by 1%, realty major DLF by 3.24% and HUL by 3.79%.

With a jump of over 5%, Anil Ambani-led Reliance Communications emerged as the top gainer in the Sensex pack. RInfra, another ADAG company, too was in high demand and settled higher by 2.48%.

The country's top telecom operator Bharti Airtel rose 2.3%.

"It seems that there is no stopping for the current bull run in the Indian market even as world markets are struggling to come to terms with a sluggish economic recovery," IIFL vice-president (research) Amar Ambani said.

All the sectoral indices on the BSE ended in the green, with FMCG, realty, auto and metal stocks leading the gains.

Among major auto stocks, Hero Honda rose about 4%, Tata Motors by about 2% and M&M 1.2%.

"It seems that Indian market has entered the bull-phase and there is a rush for index stocks," CNI Research Kishore P Ostwal said.

In the BSE-30 pack, 25 stocks ended with gains, while five stocks lagged behind and closed in the red.

Sterlite Industries led the losers pack and ended 1.1% down. NTPC lost 0.51%, TCS 0.21% and BHEL 0.15%.

European shares rose in their opening trade after four days of losses as investors remained optimistic ahead of the US Federal Reserve's meeting scheduled tomorrow. The key benchmark indices in France, Germany and the UK rose between 0.94% and 1.05%.

Asian stocks ended mixed today as the key benchmark indices in South Korea, Hong Kong, Singapore and Taiwan were up between 0.03% and 0.35% while key indices in China and Indonesia were down by up to 0.76% respectively. Japanese markets remained closed today.