Bulls pitch their tents on D-St

From extreme optimism to moderate pessimism and back to extreme optimism... All in a month's work for Sensex. With 446 more scored, guess, bulls have made Dalal St their home

Our Bureau MUMBAI

    INDIAN equities appear set to cross the highs made in June this year, as key data — globally and locally — seem to suggest that the global economy is on the path to recovery. Benchmark indices rose 3% on Monday, riding the bullish wave in world markets, sparked by rising commodity prices and better-thanexpected corporate earnings.
    Back home, brokers and investors are confused as the market has swung from extreme optimism to moderate pessimism to extreme optimism, once again in less than a month. Market operators are said to have suffered heavy losses on their trading calls, even though they would have gained by way of an appreciation of their portfolio value.
    BSE's 30-share Sensex ended the day at 15191.01, up 446.09 points, over their previous close. NSE's 50-share Nifty gained 127.30 points to close at 4502.25. This is for the fourth time in five trading sessions that indices have gained around 3% in a day.
    TCS led the rally in IT shares with a 15% rise, after the company surprised the market with better-than-expected third quarter earnings announced on Friday evening. Realty and banking were the other big performers of the day.
    Market watchers say the positive momentum itself could lift the Sensex and the Nifty above its recent highs, although valuations are once again crawling towards the overbought zone.
    Traded turnover on both exchanges combined was around Rs 95,000 crore. Dealers said most of the short positions have been covered up. But this could work against the bulls if sentiment weakened, they cautioned.
    In the US, the index of leading indicators rose in June for a third consecutive month, reinforcing signs that the recession may be nearing an end. The Conference Board's gauge of the economic outlook for the next three to six months increased 0.7%, more than forecast, after a revised 1.3% gain in May.
    Investors were also enthused by talk that CIT Group, the 101-year-old commercial finance company on the brink of bankruptcy, is close to getting a $3-billion lifeline from its bondholders. In the UK, the pound firmed up to a one-month high against the dollar and a survey showed that demand in the UK housing market was beginning to pick up.