Sensex at 2½-year high with 103-point gain

Indian equity indices on Wednesday shrugged off weak global markets to end the day at their highest levels since February 2008. Domestic markets remained weak throughout the day; however, buying from the foreign funds during the last hour of of trading helped the market close with gains. Technology stocks led the 103-point gain for Sensex on the back of higher-than expected earnings of US-based Cognizant Technology Services, which boosted outlook for Indian IT companies focussed on these markets.

The 30-share Sensex of the Bombay Stock Exchange (BSE) added 102.61 points to end the day at 18,217.44. The broader S&P CNX Nifty of National Stock Exchange (NSE) gained 28.30 points to close the day at 5,467.85.

According to the provisional figures provided by the Bombay Stock Exchange (BSE), foreign institutional investors (FII) bought stocks worth over Rs 688 crore on Wednesday. In just three days of August, FIIs were net buyers to the tune of approximately Rs 2,000 crore. For the year till date, FIIs have bought over $11 billion worth of equities and received close to 46% of net inflows into Asian market outside Japan and China. Foreign fund inflows into Indian markets have climbed 40% this year, making Sensex the most expensive in Asia excluding Japan and BRIC markets.

Said Navneet Munot, CIO at SBI Mutual Fund: “Overall, the economy is in good shape and markets are also fairly valued at these levels. While investors are taking long positions in the market, one has to remain cautious of the global events.”

“The exploration of large-caps in India is done,” said Richard C Kang, who helps manages $120 million in equities at Emerging Global in New York. According to him, India’s smallest companies may deliver investors the best returns as foreign inflows have pushed the benchmark index’s valuation to the highest among BRIC nations. “As the bull market extends, investors are more willing to take on additional risks and explore midcaps and small caps,” he said.

Most Asian markets were down on Wednesday following weaker- than-estimated US home sales and factory orders, which renewed concerns about the strength of the global economy.

Source: http://www.financialexpress.com/news/Sensex-at-2--year-high-with-103-point-gain/656130/