11k Sensex speeds

IT WAS waiting to happen. The Sensex on Tuesday finally scaled Mount 11K.

After opening firm, the Sensex breached the 11,000 mark and touched a new high of 11,017.25 but selling pressure in late afternoon trades saw it fall by 36 points to close at 10,905. Driven by the PM's comments on providing a road map for capital-account convertibility, the markets have been unidirectional for the past few days.

A key reason for the Sensex's upward journey has been the phenomenal inflow of funds from domestic and overseas institutions. The climb from 10,000 onwards was achieved in 29 trading sessions — the fastest 1,000 yet. In these sessions, FIIs pumped in $2.2 billion (around Rs 10,000 crore). Another Rs 2,300 crore was invested by domestic mutual funds. Having raised over Rs 17,000 crore in 2006 till now, domestic mutual funds are sitting on a pretty pile of cash.  A leading banker said although the long-term growth story is in favour of India, in the short term there should be some sort of correction, given the liquidity scenario in the domestic and overseas markets.

Meanwhile in Lucknow, there were joyous moments as well as a lingering fear in the minds of both investors and some brokers about an impending correction in the BSE Sensex as it touched the historic 11,000 mark on Tuesday. “The bull run had continued despite the fear among brokers and investors about a large correction in the BSE Sensex. Overall the market had remained “range bound”.

The BSE sensex touching the 11,000 mark was anyway expected”, Mradul Verma , Business Partner, Sharekhan said.