29 Apr 2009,
MUMBAI: The BSE Sensex rallied 3.65 percent on Wednesday and propelled gains to more than 17 percent in April, its best monthly performance in 10 years, as a wave of improved investor confidence swept across the world.
Foreign funds led the buying, pumping in more than $1.4 billion in April 1-27, their biggest inflow since October 2007. The rally was also powered by expectations India's economy would pick up later this year.
The 30-share BSE index jumped 401.50 points to 11,403.25, its highest since Oct. 14 last year. It rose 0.65 percent in the holiday-shortened week, taking the weekly winning streak to eight and matching the run of gains in September to October 2007.
The benchmark rose 17.45 percent in April, making it the best-performing major Asian index this month.
Outsourcer Infosys Technologies, energy giant Reliance Industries and private-sector lender ICICI Bank were among the major gainers as the rally drew fence-sitters into the market.
"There was a lot of money sitting on the sidelines, and once momentum in a market picks up, the people sitting on the sidelines automatically jump into it," Ambareesh Baliga, vice president at Karvy Stock Broking, said.
Much of the early rise was led by short-covering on the last day of monthly derivatives and then the momentum swept the market higher despite a four-day weekend ahead and concerns of a possible flu pandemic in some countries.
The market is closed on Thursday as Mumbai votes in national elections and for a local holiday on Friday.
All but one of the index components rose while in the broader market, advancers led losers 1,436 to 1,031 on above-average volume of 419.6 million shares.
The benchmark index, which has leapt 42 percent since hitting a 2009 low on March 6, could face resistance next week as political uncertainties come back to the fore ahead of election results due on May 16.
"I don't think this momentum can be sustained, because in May the election will start playing on the mind of investors," T.S. Harihar, senior vice president at ICICI Securities, said. "This could lead to a correction before the results are announced."
Added Karvy's Baliga: "No one knows who is going to come to power and all signs point to a very fractured coalition. Then how can one justify such a huge rally even if fundamentals may have slightly improved for the better. It has no logic."
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