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Sensex scales 3-month high

June 05, 2003 11:47 IST

The market proved ebullient in early trades today, and buoyant techs, backed by the strength in U.S. markets, were at the forefronts of the rally.

The early upbeat sentiment was evident in the fact that the benchmark 30-share BSE Sensex marched up 40 points to 3,257 barely as trading commenced. This is the Sensex's highest level in three months. A host of Old Economy pivotals also joined the rush upwards in early trades.

Tech pivotals took cue from the recent firm trend in Nasdaq . IT bellwether Infosys Technologies (up 3.8% to Rs 2,872), Satyam Computer (up 2.7% to Rs 180.80), HCL Technologies (up 2% to Rs 138.75), Digital GlobalSOft (up 3% to Rs 538.60) and Wipro (up 2.2% to Rs 853), were all the subject of significant gains.

In non-IT stocks, media major Zee Telefilms (up 4% to Rs 83), index heavyweight Reliance Industries (up 2% to Rs 308), ICICI Bank (up 2% to Rs 144.50), ITC (up 1.8% to Rs 691) and SBI (up 1.5% to Rs 363), made good headway.

U.S. stocks finished sharply higher on Wednesday, pushing the blue-chip Dow to close above 9,000 for the first time since August 2002, after a report showing a rebound in the vast U.S. services sector raised investor confidence that an economic recovery is under way.

The Institute for Supply Management's (ISM) index of non-manufacturing activity rose to 54.5 in May from 50.7 in April, easily beating forecasts of 52.0.

The Dow Jones industrial average strode up 116.03 points, or 1.3%, to 9,038.98, its first close above the 9,000-mark since 22 August 2002.

The broader Standard & Poor's 500 Index climbed 14.68 points, or 1.51% , to 986.24, its highest close since June last year. The technology-laced Nasdaq composite index gained 31.09 points, or 1.94%, to 1,634.65, its highest close since late May 2002.

Back home, spirited buying by FIIs has prompted a recent revival on the bourses. The cumulative inflow of FIIs for calendar 2003, which also includes inflow in the debt segment, has reached Rs 6,862.60 crore. This is much higher than the inflow of Rs 2,994.30 crore recorded in the corresponding period last year.

The inflow in this calendar  has already exceeded the inflow of Rs 3,677.70 crore recorded in the whole of calendar year 2002.

In May 2003, FIIs made their biggest monthly inflow so far in calendar 2003, at Rs 1,220.80 crore. FIIs had pumped in a net Rs 887.90 crore in January 2003 but their inflows slipped later to Rs 378.60 crore in February, Rs 411.70 crore in March and Rs 430.30 crore in April 2003.

On the back of spirited FII buying, the Sensex has gained over 300 points in slightly over one month - from a low of 2,924.03. Old Economy stocks across sectors like pharmaceuticals, refineries, oil & gas, banking, steel, cement, automobiles, textiles etc have posted gains. Players say the market rally has been broad-based, mainly due to attractive stock valuations, good dividend yields and the soft interest rate regime.

Expectations of a near normal monsoon this year have also added to the optimism, even though there are concerns over the delay in the onset of the monsoon. As per reports, the southwest monsoon is likely to hit Kerala between 8-10 June 2003. Normally, it hits the southern coast by 1 June 2003.

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