Sensex on 7th heaven...Nifty flirts with 6000

Call it strong economic fundamentals or just liquiditymagic; overseas investors have stepped up their shopping spree in September. TheSensex surged 311 points to close at 19,906. The index hit an intra-day high of19,927 and an intra-day low of 19,445. The NSE Nifty rose 96 points to close at 5,980 after touching a high of 5,990 and a low of 5,885. TheNifty took about 80 trading sessions to travel from 5000 to near 6000 levels.In Nov 2007, the Nifty had taken just 24 sessions to move from 5000 to hit the6000 mark. The Sensex ended August near 18,000.Since then, it has rallied by almost 2000 points in a mere 13 trading days.



"India’s strong economic fundamentals have prompted overseas investors to step up their shopping spree in September. FIIs have poured in well over US$2bn this month alone taking this years total to over US$15bn compared to last years US$17bn," says Amar Ambani, Vice President, Research – India Private Clients, IIFL..

FIIs have poured in well over US$2bn this month alonetaking this years total to over US$15bn compared to last year’s US$17bn.

The momentum accelerated post the release of the surprisingly strong July IIPdata. A drop in inflation from double-digit levels coupled with the RBI's hintof a pause in its monetary tightening added fuel to the fire. Liquiditywas never an issue with most central banks keeping their rates near record lowand policymakers maintaining status quo on stimulus. The big question iswhere will this ascent stop? What could possibly halt the bulls in their tracksen route to a new lifetime high?

There are no easy answers as of now. So, the best thing is to ride the momentumas long as it lasts and not get complacent. Keep a close eye on globaldevelopments for market moving events - positive or negative. For now, thebulls would want to get past the psychological levels of 6000 for the Nifty and20,000 for the Sensex before attempting new highs.