The Economic Times, September 7, 2009, Page 1
FII frenzy lifts mkt to 15-month high
Our Bureau MUMBAI
A RENEWED burst of purchases by foreign funds pushed major stock indices to a 15-month high on Monday, leading to concerns that the market has run far ahead of itself.
The BSE Sensex and NSE Nifty rose over 2% on Monday and have more than doubled in the past six months, causing market watchers to wonder if stock prices have discounted the economic recovery too quickly.
Many fund managers privately voiced concerns that valuations are slowly expanding into a bubble, but added that strong liquidity and a positive mood in world markets could push stock prices higher for some more time.
“In the short term, we could see the market rising further because there is lot of cash on the sidelines, awaiting a correction,” said Nilesh Shah, chief investment officer and deputy MD, ICICI Prudential AMC.
“But unless this cash is deployed in the market, we are unlikely to see any deep corrections,” he added.
The 30-share Sensex closed at 16,016.32, or 2.1% higher, and the 50-share Nifty gained 2.2% at 4,782.90.
Provisional data showed foreign institutional investors net bought Rs 1,060 crore worth shares on Monday and domestic institutions Rs 150 crore. The mood in world markets was upbeat following a statement over the weekend by the G20 grouping of major economies that the financial markets were stabilising and that the global economy was improving.
India was the best performer in Asia while most European markets gained between 1% and 2%.
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