X-mas cheer on Dalal Street

X-mas cheer on Dalal Street; Sensex at 19-month high

The year to date gain has been around 80% - best annual performance in the past 18 Yrs

Indian equity indices started the festive season celebrations by recording highs. A combination of short covering and positive news helped the 50-share Nifty (^NSEI : 5178.4 +33.8) of the National Stock Exchange (NSE) to hit its 52-week high of 5,197.90 points before ending the trading session at 5,178.40, registering a gain of 0.66%, or 33.80 points. Similarly, the benchmark BSE's Sensex (^BSESN : 17360.61 +129.5) ended the trading session at 17,360.61, it's highest since May 16, 2008 after gaining 129.50 points, or 0.75%

Though the Sensex has gained 3.8% this week, the most in more than a month, the year to date gain has been around 80% & this is its best annual performance in the past 18 years, according to Bloomberg data.

The inflows from overseas investors continued to be strong and provided the surprise element. For the second consecutive day they were buyers with the amount crossing the Rs 700 crore-mark, at Rs 706.83 crore, according to provisional numbers on the stock exchanges. However, domestic institutional investors chose to book profits ahead of a four day long break by net selling equities worth Rs 111.11 crore.

Speaking about the surprise rally, Arindam Gosh, CEO, Mirae Asset Global said, "It was a combination of short covering as well as fresh buying on the back of positive news that triggered a rally." Ghosh believes that the markets have been enthused by the positive macro-economic data coming in. Manasije Mishra, MD & CEO, HSBC InvestDirect reckons, "FIIs and other investors chose to cover their short position ahead of the long holiday triggering a rally. Moreover, the market crossed two technical barriers at 5,100 and 5,180 levels, which could have triggered stop losses, again prompting investors to close their short positions."

Overall buying continued in most of the emerging markets as well. The MSCI Emerging Markets Index advanced 0.9% to 972.99 at noon in London, heading for the highest closing level in a week. China's Shanghai Composite Index jumped 2.6%.

The inflows from the overseas investors in India have now touched Rs 80,500 crore in 2009 so far, compared to a net outflow of Rs 53,000 crore last year. In dollar terms, FIIs have purchased $16.8 billion worth of equities, close to the previous high of $17.2 billion in 2007. The government's move to give autonomy to the large sized public sector units to make investments overseas directly saw shares of ONGC (ONGC.NS : 1197.45 +18.5) and SAIL (SAIL.NS : 237.2 +0.4) close in the positive zone. Also, the 61% jump in foreign direct investment in the month of November, over the previous month, added to the cheer created by finance minister's statement on Wednesday about the GDP growth touching 8% levels.

Though the benchmark indices recorded impressive gains, the volume on both the exchanges fell drastically. The NSE cash segment clocked a turnover of Rs 6,460 crore, a drop of 55% over Wednesday. Thursday's volumes were rather low when compared to the average daily turnover of Rs 17,112 crore recorded during the last six months in the NSE cash segment. Elsewhere, the MSCI Emerging Markets Index advanced 0.9% to 972.99 at noon in London, heading for the highest closing level in a week. China's Shanghai Composite Index jumped 2.6%, recording the highest rally amongst the global markets.

source-www.yahoo.com