Indices soar to new lifetime highs

22 July 2005

Markets had an indecisive start in the morning after the uncertainty over the impact of the Chinese Yuan revaluation. The decline in the US dollar was expected to affect the stock prices of technology majors and keep the markets subdued.

The US markets had closed lower yesterday and Asian markets were also undecided the morning after the revaluation. The unexciting quarterly numbers from technology major Wipro further weakened the opening sentiment.

After opening marginally weak, the indices started a day long surge which took them well past the previous life time highs. Instead of leading to market weakness, traders now expect the appreciation in the Rupee to attract more FII inflows.

Hopes about improvements in the competitiveness of large Indian companies as a result of the Yuan revaluation also led to all round buying.

The rally was not threatened even once during the entire session and reports of yet another bomb scare in London towards the end of the day hardly had any impact on the indices.

Sensex closed at 7423, a gain of 119 points and the Nifty at 2266, a gain of 35 points. Nifty July futures closed the day at a premium of 2 points to the spot index.