The markets were on fire with the Sensex and the Nifty racing, but just stopping short of the 20,000 and 6,000 marks respectively. The Nifty ended just 20 points away from 6,000 at 5,980.45 up 95.90 points while the Sensex closed at 19,906.10 up 311.35 points, just 94 points away from 20,000.
Interestingly, the sector that gained the most on Monday was FMCG — the BSE FMCG index was up 3.5 per cent during the day, powered by stocks such as ITC and HUL — which have been laggards so far. The sectoral indices for FMCG, banking and automobiles also hit lifetime highs during the day.
Market watchers say that more than fundamentals, it is large scale purchases by foreign investors that are driving up the market.
“The way the market is moving It could touch 20,000 on Thursday. It will be a great day for the Indian market as people have been waiting for this day since January 2008,“ said Mr Sudip Bandyopadhyay, of Complexity Solutions. But there is an overall concern he added as foreign liquidity is driving the market. There may be a correction and this could to some extent depend on the stability of the US market.
“It’s a completely crazy market,” said Mr Jagannadham Tnuguntla, of SMC Capital. It is the costliest market and it is driven by liquidity pumped in by the FIIs, especially since the Chinese market has been down for the last 15 days. On Friday, the FIIs pumped in $373.25 million or `1,715.80 crore and the total for September was $2.9 billion. The Asian markets were waiting for a signal from the US Fed Reserve.
Bank of America Merill Lynch brokerage said “Given the pace of the rally, we believe the market is vulnerable to a correction. We believe even if the market uptrend continues, the outperformers may see some rotation. We, therefore, screen for stocks that have under-performed the current rally and are cheap relative to their history as a means of identifying ideas for investors.”