7 Sep 2009, ET Bureau
MUMBAI: The Indian stock market indices touched new 2009 highs on Monday, taking cues from the positive global markets. Much to dealers delight, the market has doubled up from March lows in just six months.
“There is upside in the market based on funds flow and earnings in the first quarter. Based on tax holdings and other seasonal factors, earnings per share on the Sensex could be quite a bit higher than the consensus and probably highest on the street right now. So our thought is that market could potentially break out.
One concern that has developed last week is on the interest rate side. The consumer price index readings are becoming quite serious and I don’t think the Reserve Bank of India can ignore it for too long. So probably by the end of this calendar year, the RBI may increase rates and that may affect interest rate sensitive sectors,” said Pankaj Vaish, MD, Nomura Financials.
After trading range bound for quite sometime, the indices finally broke out of reistance levels and charted new territory. Bombay Stock Exchange ended at 16,016.32, up 327.20 points or 2.09 per cent. The index touched an intra-day high of 16,035.50 and low of 15793.27.
National Stock Exchange’s Nifty closed at 4782.90, up 102.5 points or 2.19 per cent from Friday’s close. The broader index hit a high of 4790 and low of 4679.30.
"Market has finally managed to break out of crucial resistance levels. Benchmarks are moving in a fresh range and next target for Nifty is seen at 5050/5300. We expect large moves in midcaps segment," said a senior market analyst.
Analysts are expecting the upmove to continue provided Asian markets don’t falter (US markets are shut Monday for Labor Day), but the relatively low volumes raise doubts over strength of the upmove.
Traders continued to pick up stocks from the mid and small cap space, which are playing a catch-up game with the index stocks. BSE Midcap Index was up 2.31 per cent and BSE Smallcap Index moved 2.83 per cent higher.
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