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Mumbai , Oct. 31

EBULLIENT investors ran amok on the stock exchanges today, their buying frenzy fuelling rallies in pivotal stocks and benchmark indices.

While the BSE Sensex rallied to within sight of the 5,000-mark, the NSE benchmark index pierced a crucial resistance at 1,550.

The 30-share Sensex closed at 4,906.87, up 2.64 per cent from its previous close, while the broader 50-share S&P CNX Nifty closed at 1,555.90, 2.57 per cent above its previous close of 1,516.85.

Today was, incidentally, also the last day for companies to declare results for the second quarter of the current fiscal.

Strong corporate performance this quarter after a long period of subdued performance has led to entire sectors getting re-rated on the exchanges.

Dealers said that the rally was led by technology stocks buoyed by news of excellent GDP growth in the US.

The BSE's technology yardstick, BSETECk, rose 3.16 per cent while its NSE counterpart, the CNX IT, rose nearly five per cent.

US GDP grew 7.2 per cent in the first half, beating economists' expectation of a six per cent growth. It was the highest in 19 years.

A good showing by US companies would brighten prospects of Indian software suppliers and add spice to the "outsourcing story" in the manufacturing sector, according to equity analysts.

Buying at the BSE was so broad-based that only about 740 stocks declined even as more than a thousand shot up.

In the `A' group, while 150 shares advanced, prices of only 43 slipped from their previous closing levels. The BSEPSU index rose 3.22 per cent to close at 3,045.60 and BANKEX - which tracks bank scrips' performance - closed at 2,444.47, a gain of 3.22 per cent from its previous close.

"The F&O rollover (broker-speak for expiry of October futures and options and November position build-up) went off without a hitch yesterday. Besides, several companies have turned in top-notch performance. Both the factors have imparted a significant amount of confidence in the market. Meanwhile, FII buying continues unabated," a dealer with a domestic equity broking firm said.

Foreign institutional investors were net buyers of more than Rs 337 crore worth of equities yesterday, a day that saw even domestic mutual funds that have been net sellers through the beginning of the week turning buyers.

According to SEBI data, domestic funds were net buyers of equities worth Rs 150 crore.

"Several mutual funds that had liquidated positions over the past week and at the beginning of this week were sitting on cash. They had avoided taking fresh positions due to redemption requirements, NAV adjustments and an expectation that the market would remain range-bound. When the market broke out of the range, they had no choice but to start buying before valuations ran up too high," a dealer with a private bank said.

The overall buoyancy is expected to continue at open next week too and several dealers have begun to talk about the Sensex hitting 5,000 levels soon. Dealers' estimates range from 5,200 to 5,400. "After that the Sensex will take a breather," a retail dealer said.

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