The Hindu : Business : Decision on PSUs boosts stock market prices

Online edition of India's National Newspaper
Tuesday, Jul 26, 2005

Business

Business

Decision on PSUs boosts stock market prices

Sensex crosses 7500-mark; sustained FII buying

MUMBAI: The bull charge on the Bombay Stock Exchange was virtually unstoppable on Monday, with the Sensex breaching the crucial 7500-mark and touching a fresh lifetime closing peak of 7505.60, driven up by sustained foreign institutional investment buying coupled with shortcovering by operators.

Buying was at its peak when the benchmark touched the historic high of 7526.88 during intra-day deals, buoyed partly by the Centre's nod to double the investment limit of profit-making public sector units.

The BSE benchmark 30-share index opened moderately higher at 7427.65 and later surged to end the day at 7505.60 against last Friday's close of 7423.25, a net rise of 82.35 points or 1.11 per cent. The FIIs were believed to be heavy buyers in blue chip counters. The market seemed to have totally discounted a warning by the Finance Minister, P. Chidambaram, to investors against getting carried away by the booming stock markets.

The Union Cabinet on Monday gave its assent to double the investment limit of profit-making public sector undertakings, for which prior approval of the government was not required.

Investors cautioned

Our Delhi Correspondent writes:

Hailing the bull run on the bourses with the Sensex crossing the 7500 mark on Monday, the Chairman of Securities and Exchange Board of India , M. Damodaran, has, however, cautioned investors to take "informed decisions" for getting a reasonable return on their investments. Talking to newspersons after an interactive session with the chief executives of listed public sector undertakings here, Mr. Damodaran disagreed with the view that prices of scrips being traded in the stock markets were overpriced.

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