Bull-run on Indian bourses to continue

Mumbai, May 6 :

The momentum in the Indian stock market is likely to continue uninterrupted in the coming sessions as overseas investors pour more money into the trading ring buoyed by strong economic growth prospects.

Analysts say although the market may witness selling pressure in select stocks at sharply higher levels, the overall trading pattern would remain positive on sustained inflows of domestic as well as overseas funds.

The market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed Friday at 12,359.70, representing a massive gain of 507.77 points or 4.23 percent over its previous week’s close.

The stock market had closed with a loss of 1.5 percent in the previous week as investors dumped stocks after the market regulator cracked down on top brokerage firms and banks for alleged manipulation in initial public offerings.

The key index touched an all-time intra-day high of 12,482.91 on May 4 on sustained institutional buying interest in new as well as old economy heavyweights.

“Strong liquidity will continue to drive the market northwards in the coming days. Domestic mutual funds and foreign institutional investors will continue to pump in money,” said an analyst with a Mumbai-based brokerage firm.

“After turning slightly sluggish in past couple of weeks, flow of overseas funds into domestic trading ring has again turned strong in the recent sessions. This trend is likely to continue,” added the analyst.

Experts say the flow of funds has got a boost by the impressive financial numbers announced by heavyweight new as well as old economy companies like Tata Consultancy Services, Infosys Technologies and Reliance Industries.

India’s economy is likely to expand between 7.5 percent and eight percent in the current fiscal year on sustained growth in farm and industrial production, according to the Reserve Bank of India (RBI).

India’s economy grew by a robust 8.1 percent in the fiscal year ended March 31, 2006, compared to 7.5 percent in previous year. The average eight per cent growth in last three years has made India one of the fastest growing economies. In the truncated intra-week trade, the stock market closed on a positive note Tuesday and kept surging higher.