Reference Auto

Foreign institutional investors or FIIs are back with a bang and the markets can expect some correction in the near term with the benchmark index, the Sensex, heading towards the 20,000 points-mark again.

If the trend is any indication, the feat (20,000 points) can be achieved within a couple of weeks as market men are of the opinion that the bourses are on a consolidation phase now.

Just last week, the Sensex saw gains for the second successive week and went up by 605 points to end the week at 19,420.39. In the Sensex pack, 16 stocks rose while the remaining 14 fell.

The benchmark BSE Sensex has not only gained for the second consecutive week but also saw a 9.1% surge in March, the biggest monthly rise since September last year.

The small-cap and mid-cap segments turned out to be hot picks, and among the sectors, consumer durables, auto and real estate were attractive.

FIIs are on a reverse gear, turning net buyers from net sellers till recently. They bought shares worth Rs 8,548.14 crore in the last week of March.

But the movement of key indices will also hinge on factors like oil prices and inflation and a surge in the figures could come as a damp squib to the current bull run. However, food inflation eased in the previous week and this is an encouraging sign.

There was some good news in the form of some healthy macro-economic figures. The country’s exports surged by 50% in February and also surpassed $200 billion in the first 11 months of the financial year owing to rising demand in the global markets, especially the US.

According to figures available, exports rose sharply by 49.7% year-on-year during February to $23.5 billion. The April-February 2010-11 figure stood at $208.2 billion. This is a rise of 31.4% over the same period a year ago.

Asian stock markets performed in a mixed fashion on Friday as oil prices were at a 30-month high. Japan’s Nikkei 225 fell 0.48 per cent to 9,708.39 as the country’s government was still grappling to control leak at a nuclear plant triggered by a tsunami in early March and the country has sought help from the US and France to control the leak.

Hong Kong’s Hang Seng surged 1.17 per cent to 23,801.90 while South Korea’s Kospi went up 0.68 per cent to 2,121.01. Also, China’s Shanghai Composite Index rose 1.34 per cent to 2,507.86.

The rally at the bourses was expected as the markets have remained subdued for the last four to five months and a good bit of correction was needed. The markets are likely to correct further but some positive triggers are needed to keep the bull run going.