India's benchmark share index is poised to hit the 10,000 mark this week, capping a nearly yearlong rally driven by unprecedented demand from foreign investors.
The 30-share SENSEX index rose 3.7 percent last week, and was up again yesterday, hovering at around 9,900 points.
"It's a matter of adding just 100-odd points. That should happen anytime. There is a lot of liquidity. Money is coming in from all sources," said Pankaj Batra, a New Delhi-based broker.
The SENSEX has risen 60 percent since May last year, when the current rally began.
The market surge cuts across all sectors, from cement, steel and banking, which have been driven up by a housing boom, to hotel chains that are putting up more tourists.
The demand is driven by foreigner investors, led by the Japanese recently, eager to seize opportunities in one of the world's fastest-growing economies, which is expanding at close to 8 percent a year.
Major industrial companies such as oil and petrochemicals giant Reliance Industries Ltd and the Tata group -- which includes divisions that produce steel, automobiles and software -- are thriving on increased exports and strong domestic demand. They also have been able to cut costs and improve quality.
The enthusiasm of overseas investors -- who bought a record US$10.7 billion in equities last year -- has encouraged Indians to park more money in equities, helping domestic mutual funds make new offerings.
Four major funds launched this month have already mobilized more than 60 billion rupees (US$1.3 billion) and a significant part of that money is expected to enter the market this week, said Dhirendra Kumar, chief executive of Value Research, which tracks mutual funds.
The SENSEX shed 21.76 points or 0.22 percent to close at 9,849.03 points yesterday.
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