Sensex turns volatile as profit booking sets inMay 19th, 2009 - 4:28 pm ICT by ANI
Mumbai, May 19 (ANI): Following a comfortable victory of the Congress-led United Progressive Alliance (UPA), Bombay Stock Exchange Benchmark Sensex was trading two percent higher on Tuesday.
By 12:03 p.m., the 30-share BSE index was up 2.1 percent at 14,586.98 points, after starting up 3.3 percent and then falling as much as 3.1 percent.
Twenty stocks advanced while in the broader section, gainers led losers 2 to 1 on heavy volume of 351.1 million shares.
Foreign funds, which have pumped about four billion dollars into the Indian market since mid-March, will be encouraged to invest more with a stable government that is not shackled by former allies such as the communists.
The 50-share NSE index was up 1.2 percent at 4,375.50.
The strong win of the UPA is expected to enable the Government to push economic reforms such as privatisations and freer foreign investment rules to boost slowing growth, but the biggest one-day surge in almost two decades on Monday was seen as overdone.
Market analyst Sunil Shah said that investors need to be cautious at this moment and should not be swayed by the movements in the market.
“We saw market going down by 500 points and then recovered but the thing is before taking a next decisive trend, upward movement, market is going to remain little volatile. So investors have to be very cautious, and do not get swayed by these movements. Stick to good fundamentals, stick to good companies. And use every fall as an opportunity to enter into the market. Because I see Indian market will emerge as a safe haven,” Shah said.
Investors are also expected to extend its gains on Tuesday.
“In today’s market scenario yesterday’s profit booking is going on. I hope that it will rise. Market is going up and down, it will sustain and would go up,” said Sharad Kumar, an investor.
A few investors standing outside the BSE also said that when Manmohan Singh will be elected as leader, reforms are expected to take precedence over everything.
“Yesterday was a complete change. The market was expecting some sort of coalition whereby the Left may support from outside but now that its almost clear mandate for the Congress and Manmohan Singh in the saddle, one expects reforms to take precedence over every other thing,” said Ramesh Prasad, another investor.
Export-led IT sector, which include outsourcers such as the Infosys Technologies and the Wipro, fell, as a jump in the rupee’s value against the dollar would affect their profitability. (ANI)
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