Bourses in upbeat mood on reform hopes, Sensex jumps 738 pts

Nothing seems to stop Indian bourses from moving ahead as sustained flow of investments this week lifted the key indices -- Sensex and Nifty -- by five per cent, extending the weekly rally to yet another week.

The key driver of capital markets, Foreign institutional investors, gradually became aggressive buyer and bought shares worth $ 445.10 million on May 28, taking the total capital inflows so far in May to over $ 4.0 billion.

Taking the weekly rally to twelfth straight week, the Bombay Stock Exchange 30-share barometer flared up by 738.10 points, or 5.31 per cent, to nearly nine-month high of 14,625.25 at the weekend from its last weekend's close.

Similarly, the National Stock Exchange's Nifty soared by 210.45 points, or 4.97 per cent, to end at 4,448.95 from its previous weekend's close.

Taking cues from government talks on reforms, bulls too tightened their grip on the market enlarging commitments along with foreign funds.

Major trigger came in the form of the release of GDP growth rate of 5.8 per cent in the last quarter of 2008-09 and 6.7 per cent for the fiscal, which were stronger than the market expectations.

Taking charge of Petroleum Ministry for a second term, Murli Deora's statement on oil price deregulation reinforced optimism about faster economic reforms.

Analysts said the market is expected to attract more foreign interest in the coming days with indications that the full budget for 2009-10, slated in July, may focus on fiscal prudence and disinvestments of public sector units.

Financial sector is likely to witness low interest rate regime with inflation continuously below one per cent and sufficient liquidity in the banking system.

Realty counters stole the limelight with the BSE Realty index climbing up 15.38 per cent over the week on hopes of increased portfolio inflows and a turnaround in the sector after the political stability.

The BSE Metal Index shot up by 11.68 per cent, the CD index by 9.98 per cent and the PSU index by 9.79 per cent.

Rising participation by public investors could be gauged by increasing activity in the Smallcap and Midcap shares which outperformed the Sensex.

The Smallcap index flared up by 8.59 per cent and the Midcap index by 6.33 per cent.

The broad-based BSE-100 index too shot up by 378.44 points or 5.23 per cent to close the week at 7,620.13 from its preceding weekend's close.

The trading volume for the week remained virtually steady at Rs 1,11,845 crore on the NSE and Rs 36,674 crore on the BSE as compared to Rs 1,13,389 crore and Rs 35,450 crore respectively.