The Hindu Business Line : Market sizzles, Sensex soars

AFTER the stock market regulator announced steps to pump in more liquidity into the booming stock market, the Government today gave investors reason to make use of it.

As news of the `mini-Budget measures' filtered into the stock market towards the fag-end of trading, investors went berserk buying shares unmindful of quality or price to push up major stock indices to record closing levels.

The prices of major stocks opened firm in the morning and strengthened through the day as the market soaked in the SEBI's decision to allow brokers to fund clients' margin requirements.

Rising stock prices helped the BSE Sensex rise more than 2.5 per cent or 151.52 points to close at its all-time high of 6,108.54.

The broader 50-share S&P CNX Nifty of the NSE gained 51.80 points or 2.70 per cent to end the day at a record 1,916.75.

Sharp rises in the broader indices like the BSE 500 and the BSE 200 reflected active buying in mid-cap and small stocks.

A broker said that the full impact of the Government's decision to change the indirect tax structure would be seen in tomorrow's trading.

Sustained buying by institutional as well as retail investors suggested that the market was in an extremely bullish mood. The rally is expected to continue well into 2004 on the back of strong economic and corporate fundamentals, another broker said.

Mr Ravi Chadda, Head (Business Development), Motilal Oswal Securities said, "The mood in the market is extremely bullish with lot of positive developments in the last few days."

He added that good news such as the revised margin trading norms, resumption of talks between India and Pakistan and the Government's decision to cut Customs duty are positives for the stock market.

Mr Ambarish Baliga, Vice-President, Karvy Stock Broking, said: "The Government announcement caught everybody by surprise, albeit a pleasant one." If Infosys beats equity analysts' expectations tomorrow, the stock market would fire up again, said a dealer.

Several brokers expect stocks to open firm as the mood was upbeat at close. Some expect the BSE Sensex to cross its all-time level of 6,151 touched on February 14, 2000.

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