Sensex’s 5-Day Rally is Longest Since Sept

The BSE Sensex climbed for a fifth consecutive session on Thursday, its longest winning run in five months, as investors picked bargains in a market that is still among the worst performers in emerging regions. Financials powered the main index up more than 1% after food inflation eased to a two-month low in early February on moderating prices of onions and other vegetables.
Analysts said the market was still not out of the woods, with foreign institutional investors (FIIs) turning net sellers this year following a spate of political corruption scandals and rising interest rates. Reliance Communications fell as much as 2.8% after Anil Ambani, who controls the No 2 mobile carrier, was questioned on Wednesday in a widening corruption investigation that has battered the government. The stock recovered later and ended up 0.3% at Rs 99.95.
The 30-share BSE index rose 1.13% or 205.92 points to 18,506.82, its highest close in three weeks. Nineteen of its components closed in the green.
The benchmark has risen nearly 6% over five sessions, but is still down 9.7% in 2011, as foreign funds pulled out $1.7 billion. "Food inflation coming off a bit has provided some relief," said RK Gupta, managing director of Taurus Mutual Fund, but added there was strong resistance for the broader 50-share Nifty index at around 5,600 points.
The Nifty, or NSE index, closed up 1.2% at 5,546.45 points. "If FIIs end up as net buyers for a couple of more sessions and if we are able to hold on above 5,600 level, the downside risk will be limited," Mr Gupta said. Foreign funds had bought a record $29.3 billion of stocks in 2010 and helped the BSE index rally 17.4%.
The market breadth was positive almost through the day, with advancing shares outpacing declining ones in a ratio of 1.5:1. Around 278 million shares changed hands on the BSE, lower than the 30-day average daily volume of 307 million shares. —Reuters