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Sensex at 9-mth high; investors cheer econ data

June 1, 2009

The BSE Sensex traded firm on Monday as investors cheered improved manufacturing data at home and signs of recovery in the global economy.

The benchmark stayed mostly in positive territory, touching an intra-day high of 14,906 and finally closing 215 points higher at 14,840 – its highest close in almost nine months. The fifty-share Nifty ended 1.8 percent higher at 4529.

Data released on Monday showed manufacturing activity expanded for a second straight month in May to its highest level in eight months. Exports fell by 33.2 pct from a year earlier to $10.74 billion, while imports dropped by 36.6 percent to $15.75 billion.

Global sentiments were upbeat on positive Chinese manufacturing data.

The main contributors to the benchmark’s rise were Infosys, HDFC, ITC and NTPC.

The BSE Mid-Cap Index (up 2.9 percent) and the Small-Cap Index (up 3.5 percent) continued their rally.

On the sectoral front, the BSE Realty Index rose 5.6 percent, followed by the Metal Index which ended 5.3 percent higher. The BSE Banking Index however ended down at 0.8 percent.

FIIs bought net $176.4 million in shares and $16.7 million in debt.

There are signs of a boost in demand and the presence of sufficient liquidity in the system – inflation rate has softened, manufacturing index is showing signs of improvement, interest rates are falling and several domestic firms are raising money via commercial paper, QIP route and bonds.

Do you think these indicators of improving economic health will cement investor sentiments and help the benchmark reach new highs?

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