Bull-lit Sensex scorches 4.5K

MUMBAI: Stocks continued to sizzle on Friday as the BSE''s benchmark 30-share index crossed the psychological 4,500 mark for the first time since September 2000 to close the week at 4,552.92 points, up 2.20 per cent.
With the BSE Sensex rising 56 per cent since end-April, the bulls on Dalal Street seem here to stay.
With the economy in top form, interest rates low and a strong currency to boot, market people see Friday''s rally as just another milestone en route to the 5,000-mark, which by consensus estimtes, seems only six months away.
On Friday, the Indian currency also touched a three-year high, closing at 45.39 against the dollar compared to 45.75 on September 15, 2001.
The big guns on the street are bullish. Hemendra Kothari, chairman of DSP Merrill Lynch, says that global investors will now find it impossible to ignore the fact that India''s is the second fastest growing economy after China.
"Besides, this is a time when all the economic pieces are fitting in. The monsoon has been good, the cyclical industries are faring well, the corporate sector has been rejuvenated and the market technicals are positive," he says.
Other than foreign investors, retail investors also continue to enter the market. According to reports, NSDL, the share depository, is receiving 30,000 transaction requests a week from retail investors compared to 6,000 requests a week three months ago.
Uday Kotak, vice-chairman of Kotak Mahindra Bank, says that Indians are terribly under-invested in equity after losing money during the primary market boom in the early nineties and then again in the tech-stock boom at the end of the millenium.
"It''s a perfect time to invest in the market but individuals are better off seeking advice from wealth managers who can assess risk, rather than relying on tips," he says.
Mr Kothari of DSP also urges small investors to use mutual funds to invest. And with interest rates continuing to be low—one-year deposits, for instance, are now 5.75 per conpared compared to 9.25 per cent in 2000—small investors may have little option but to consider stocks, say investment advisors.
As with every rally, there are concerns that this time around the market may have flared up too fast and speculative money flows into the market may have much to do with the current rally. "Such concerns will always stay," says Mr Kothari.