Sensex breaches 28k

The Sensex breached the 28k mark for the first time ever in a rally led by bank stocks and bolstered by crude prices falling to a multi-year low and easing inflation, which in turn raised hopes of a rate cut by the RBI soon. The rally was also helped by strong foreign fund buying after the Bank of Japan last week expanded its monetary stimulus package by nearly 40%. The decision will ensure ample liquidity for global investors at low rates and induce buying of risky assets like emerging market stocks. During the day , the sensex opened slightly higher and rallied to an intra-day high at 28,010 but struggled to remain above the 28k level and closed 56 points up at 27,916. This was the fourth consecutive session for the index to hit record high levels.Since Friday , the day Japan announced to expand its monetary stimulus package, foreign funds have been net buyers in the market. On Wednesday , they pumped in over Rs.1,000 crore into the market, taking the month's total tally to about Rs.4,400 crore (about $700 million), Sebi and exchange data showed.
A recent JP Morgan strategy report pointed out that FIIs turned buyers of equities across most emerging markets including India last week.
The strong rally has also taken investors' wealth to a record peak with BSE's market capitalization now at Rs.97.5 lakh crore. Since the start of the year, the market rally has made investors richer by Rs.27.5 lakh crore, backed by a 32% rise in the sensex.
A section of the market feels that the rally has still enough steam left. Religare Securities, which had set a sensex target of 32,000 soon after Narendra Modi took over as PM in mid-May , believes that is the best case scenario for the index.

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