Continued strong FII inflow and surge in US stocks on Tuesday may see Sensex strike fresh all time high today. RBI staking on Tuesday that recent fall in global crude oil prices should help ease inflation pressures would further boost market sentiment. But higher levels may attract profit taking due to a sharp surge in Sensex over the past few weeks.
As per provisional data, FIIs were net buyers to the tune of Rs 1270 crore on Tuesday (14 November), the day when Sensex had gained 26.50 points in volatile trade. Their cumulative inflow for calendar 2006 has reached $7.5 billion (till 13 November) compared to a record inflow of $10.7 billion in 2005.
Revision in earnings estimates by brokerages for companies following strong Q2 results has fuelled surge in FII inflow in the past few weeks. Another factor that has contributed to the surge in FII inflows is the fresh number of FIIs registering with Sebi every day. Since January this year, there has been an addition of over 150 FIIs, and the aggregate now stands at 978. A strong global liquidity, too, has aided the fund flow.
A section of the market attributes the solid surge on the Indian bourses to increasing recognition of India’s long-term growth prospects. From 4,644 on 23 June 2004, it has galloped 189% in less than two and a half years.
Asian stocks were in the green on Wednesday (15 November). Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.04% to 0.6%.
US stocks rallied on Tuesday, pushing the Dow to a record closing high, after Wal-Mart Stores Inc. and Target Corp. posted stronger-than-expected profits and inflation data eased interest-rate concerns. Tuesday's record finish is the 15th record close for the blue-chip Dow average since the beginning of October. The Dow Jones industrial average shot up 86.13 points, or 0.71 percent, to end at a record 12,218.01. The Standard & Poor's 500 Index gained 8.80 points, or 0.64 percent, for a close at 1,393.22. The Nasdaq Composite Index rose 24.28 points, or 1.01 percent, to 2,430.66.