Date:16/10/2007 URL: http://www.thehindu.com/2007/10/16/stories/2007101660990100.htm

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Sensex breaches 19,000 barrier

Oommen A. Ninan

MUMBAI: The stock market continued its bull run on Monday with a gain of 639.63 points, as the benchmark Bombay Stock Exchange 30-Share Sensitive Index (Sensex) crossed another milestone — the 19,000 mark.

From the 18,000-mark, this was reached in just four trading sessions, led by metal stocks.

“Market levels need to be examined in relation to the fundamentals and valuations. India is in a sweet spot where economic activity is robust, corporate fundamentals are strong and there is a pent-up demand for Indian equities, especially from foreign investors. We believe that long term opportunities continue to be exciting and the market should reflect this over a period of time, though there might be some ups or downs in the near term,” said Sivasubramanian K.N., Senior Portfolio Manager – Equity, Franklin Templeton.

Sensex was up by 639.63 points or 3.47 per cent at 19058.67, and the 50-Share Nifty also was up by 242.15 points or 4.46 per cent at 5670.40. This rise came on the back of some strong sectors for which the macro picture is quite bright — power, capital goods, infrastructure and telecom. Companies from these sectors are now the favourites of the market.

Foreign Institutional Investors are pumping in huge money in the equity market and this too is pushing up the index. Since September, they have nearly pumped in more than Rs. 30,000 crore in the cash market. After the U.S. Federal Reserve cut interest rates by 50 basis points, a re-rating of the emerging markets has been seen wherein liquidity flows are quite robust.