Indian shares to scale new highs this week
Monday, 5 November 2007
MUMBAI, Nov 4 (AFP): Indian share prices are expected to hit fresh record highs this week on sustained overseas fund buying, though volumes could dip marginally during the Hindu festive season, dealers said.
They said fresh buying opportunities could emerge on declines, as concerns linked to a recent regulation for foreign investors and local and global interest rate cuts appear to have eased.
For the week to November 2, the Mumbai stock exchange's benchmark 30-share Sensex index surged 3.80 per cent or 733.06 points to close at 19,976.23.
It was a historic week as the benchmark Sensex crossed the 20,000 points level for the first time on October 29, before slipping off on profit taking.
"We appear to be on course to hit new highs. The bounce back from Friday's lows (despite weak global trends) suggests there is some steam left in the bull run," said a dealer at Mumbai-based brokerage Pyramid Securities.
The markets were volatile as India's central bank, the Reserve Bank of India, kept interest rates unchanged but hiked the cash reserve for banks by 50 basis points to 7.50 per cent due to excess money supply and rising capital flows.
The next day, the US Federal Reserve lowered rates by 25 basis points to 4.50 per cent, which increased optimism for flows towards emerging markets such as India.
With the quarterly earnings season over, the next trigger for the markets could be influenced by global factors, dealers said.
At Friday's close, the Sensex was up 44.89 per cent on last year's close of 13,786.91, led by record overseas fund flows of US417.4 billion.
Dealers warned the markets could turn even more volatile at higher levels due to weaker participation from traders during the festive Diwali season.
A special ceremonial trading session is expected to take place November 9 when India celebrates Diwali, the festival of lights.
They said fresh buying opportunities could emerge on declines, as concerns linked to a recent regulation for foreign investors and local and global interest rate cuts appear to have eased.
For the week to November 2, the Mumbai stock exchange's benchmark 30-share Sensex index surged 3.80 per cent or 733.06 points to close at 19,976.23.
It was a historic week as the benchmark Sensex crossed the 20,000 points level for the first time on October 29, before slipping off on profit taking.
"We appear to be on course to hit new highs. The bounce back from Friday's lows (despite weak global trends) suggests there is some steam left in the bull run," said a dealer at Mumbai-based brokerage Pyramid Securities.
The markets were volatile as India's central bank, the Reserve Bank of India, kept interest rates unchanged but hiked the cash reserve for banks by 50 basis points to 7.50 per cent due to excess money supply and rising capital flows.
The next day, the US Federal Reserve lowered rates by 25 basis points to 4.50 per cent, which increased optimism for flows towards emerging markets such as India.
With the quarterly earnings season over, the next trigger for the markets could be influenced by global factors, dealers said.
At Friday's close, the Sensex was up 44.89 per cent on last year's close of 13,786.91, led by record overseas fund flows of US417.4 billion.
Dealers warned the markets could turn even more volatile at higher levels due to weaker participation from traders during the festive Diwali season.
A special ceremonial trading session is expected to take place November 9 when India celebrates Diwali, the festival of lights.