After a disappointing Diwali, investors seem headed for a prosperous New Year. Stock market investors have gained Rs 2,27,580 crore with the benchmark Sensex moving up by 3.5 per cent to 19,340 points in the week ended on Friday.

A spate of reforms announced by the Government and positive outlook given by the global rating agencies Moody’s and Goldman Sachs pushed up the BSE market-cap and helped investors’ make handsome profits on their investments.

The runaway Sensex boosted the entire market sentiment and taken along 47 shares from different sectors to their 52-week high. The prominent among them include Asian Paints, BASF India, Divis Lab, Gitanjali Gems, HDFC Bank, Inani Marbles, IndusInd Bank, ING Vysya Bank, ITDC, Jyothy Laboratory, Kaveri Seed, Priti Mercantile, Star Delta Transformers, Titan Industries and Yes Bank.

Confidence booster

The Government climb down to discuss the pros and cons of allowing foreign direct investment (FDI) in retail along with voting on the decision by members of both Lok Sabha and Rajya Sabha has instilled confidence among institutional and foreign investors.

The possibility of getting Parliament approval for 25 important pending Bills including pension reforms, FDI hike in the insurance sector and Lokpal Bill has also brightened.

Deven Choksey, Managing Director, K.R. Choksey Shares and Securities said the market may continue to gain further in December though there will be profit-booking at regular intervals.

“Some of the sectors that will retain the rally include banking and infrastructure. The auto sector will also bounce back after the recent concern over a slowdown in sales,” he added.

Improvement in foreign inflow and the reforms being rolled out by the Government may further help rupee’s appreciation against dollar through December and may lead to RBI reducing key bank rates in January. This will pave way for much needed drop in interest rate for India Inc, said Choksey.

> Suresh.iyengar@thehindu.co.in

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