The first million is always the hardest to make; the rest come looking for you. It took four years for the Sensex to touch its first 1,000-mark in 1990, and just four days to sprint from 18,000 to 19,000. Investors and bystanders continue to watch with disbelief as the index shattered each successive 1,000-mark with growing ease.
Does it make sense? Where is it headed? How long can it last? Sections in the market are beginning to ask these questions and the finance minister has already sounded a word of caution. But even as the stunning rally has baffled most market watchers, bulls are not showing the slightest signs of exhaustion.
Friday's correction was a distant memory as the 30-share Sensex surged 639.63 points or 3.5% to close above 19k for the first time, at 19,058.67. During the day, it touched a new peak of 19,095.75. The 50-share Nifty touched a new high of 5,682.65, before settling at 5,670.40, up 242.15 points or 4.5%. Before the day's session was over, the subject of discussion in most dealing houses was not about valuations, politics or earnings. It was about when the market would touch the 20,000-mark and whether that would be the peak.
"Everybody is searching for a top, but you never get it when everyone is looking for it at the same time," says Ramesh S Damani, BSE broker. He expects steel and cement shares to lead the rally from hereon. Adding that he was not worried by the pace of the rally, Mr Damani said: "The market does not appear overbought even at current levels and bulls could be in for a pleasant surprise."
Such optimism may not appear misplaced given that the tidal wave of FII money is not showing any signs of ebbing yet. To a great extent, a rising rupee has made it a self-fulfilling prophecy, with more foreign money coming to catch the currency upside.
According to provisional data, foreign funds net bought Rs 2,868 crore worth of shares on Monday, pushing frontline stocks like Reliance Energy (+13%), Reliance Communications (+5%), Tata Steel (+7%), ONGC (+9%), SAIL (+15%) and HDFC Bank (+4%) to new peaks. And while it did not touch a new high, index heavyweight Reliance Industries (+4%) was a major contributor to the rally.
RIL, REL and Reliance Communications have been the driving forces of the last 2,000-point rally in the Sensex. The meteoric rise in the prices of these three stocks over the past month has sparked a debate over valuations, but bears appear wary of going short on these stocks. Brokerage house Goldman Sachs has downgraded its rating on Reliance Industries to 'neutral' saying the current price levels did not offer an attractive entry point.
"While we remain long-term positive on RIL primarily on the back of its E&P (exploration and production) potential, we believe the market is now already pricing in future exploration success into the next 3-4 years -- increasing downside risk from current levels, in our view," the Goldman Sachs note to clients said.
Unlike during the technology stocks-led rally seven years ago, broking houses have been more circumspect this time around, and there have been a fair amount of downgrade reports. But most fund managers are in no mood to heed the calls for restraint, and so far, they have been proven right.
Secondline shares kept pace with the rise in top tier stocks, something that had not been witnessed for some time. The BSE-100 and BSE-200 indices gained close to 4%. "Lack of market breadth was a cause for worry, but even that is now showing signs of improvement," said Mr Damani.
On the corporate earnings front, TCS's second quarter numbers -- though not spectacular -- were in line with market expectations. IT stocks in general continued to underperform, with Satyam, TCS and Wipro gaining around 1% each, while Infosys ended marginally lower than its previous close.
Via ET
Does it make sense? Where is it headed? How long can it last? Sections in the market are beginning to ask these questions and the finance minister has already sounded a word of caution. But even as the stunning rally has baffled most market watchers, bulls are not showing the slightest signs of exhaustion.
Friday's correction was a distant memory as the 30-share Sensex surged 639.63 points or 3.5% to close above 19k for the first time, at 19,058.67. During the day, it touched a new peak of 19,095.75. The 50-share Nifty touched a new high of 5,682.65, before settling at 5,670.40, up 242.15 points or 4.5%. Before the day's session was over, the subject of discussion in most dealing houses was not about valuations, politics or earnings. It was about when the market would touch the 20,000-mark and whether that would be the peak.
"Everybody is searching for a top, but you never get it when everyone is looking for it at the same time," says Ramesh S Damani, BSE broker. He expects steel and cement shares to lead the rally from hereon. Adding that he was not worried by the pace of the rally, Mr Damani said: "The market does not appear overbought even at current levels and bulls could be in for a pleasant surprise."
Such optimism may not appear misplaced given that the tidal wave of FII money is not showing any signs of ebbing yet. To a great extent, a rising rupee has made it a self-fulfilling prophecy, with more foreign money coming to catch the currency upside.
According to provisional data, foreign funds net bought Rs 2,868 crore worth of shares on Monday, pushing frontline stocks like Reliance Energy (+13%), Reliance Communications (+5%), Tata Steel (+7%), ONGC (+9%), SAIL (+15%) and HDFC Bank (+4%) to new peaks. And while it did not touch a new high, index heavyweight Reliance Industries (+4%) was a major contributor to the rally.
RIL, REL and Reliance Communications have been the driving forces of the last 2,000-point rally in the Sensex. The meteoric rise in the prices of these three stocks over the past month has sparked a debate over valuations, but bears appear wary of going short on these stocks. Brokerage house Goldman Sachs has downgraded its rating on Reliance Industries to 'neutral' saying the current price levels did not offer an attractive entry point.
"While we remain long-term positive on RIL primarily on the back of its E&P (exploration and production) potential, we believe the market is now already pricing in future exploration success into the next 3-4 years -- increasing downside risk from current levels, in our view," the Goldman Sachs note to clients said.
Unlike during the technology stocks-led rally seven years ago, broking houses have been more circumspect this time around, and there have been a fair amount of downgrade reports. But most fund managers are in no mood to heed the calls for restraint, and so far, they have been proven right.
Secondline shares kept pace with the rise in top tier stocks, something that had not been witnessed for some time. The BSE-100 and BSE-200 indices gained close to 4%. "Lack of market breadth was a cause for worry, but even that is now showing signs of improvement," said Mr Damani.
On the corporate earnings front, TCS's second quarter numbers -- though not spectacular -- were in line with market expectations. IT stocks in general continued to underperform, with Satyam, TCS and Wipro gaining around 1% each, while Infosys ended marginally lower than its previous close.
Via ET
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