Sensex climbs for sixth straight day, closes 61 points higher

The 30-share benchmark index opened higher at 10,876.15 and seesawed between a high and low of 10,932.12 and 10,655.96 before finally settling at 10,803.86, its highest close since October 15.

Following Thursday's rally, the Sensex is up 11.46 percent this year. The prime index closed nearly 52 percent down in 2008, a year marked by economic downturn, credit squeeze, rising inflation and high global crude prices.

Eighteen components rallied on Thursday with Tata Steel leading the pack. The steel producer jumped 7.71 percent to close up at Rs.261.20.

Utility majors Reliance Infrastructure and Tata Power surged 5.66 percent and 0.81 percent respectively.

Financial majors ICICI Bank, State Bank of India and HDFC Bank soared 5.62 percent, 1.47 percent and 0.02 percent respectively.

Aluminium producers Sterlite Industries and Hindalco Industries advanced 3.15 percent and 1.12 percent respectively.

Drug makers Ranbaxy Laboratories and Sun Pharmaceuticals climbed 1.23 percent and 1.19 percent respectively.

Sensex heavyweight Reliance Industries rose 0.52 percent.

Other major gainers were Jaiprakash Associates (up 7.40 percent), DLF (up 4.83 percent) and Larsen & Toubro (up 2.76 percent).

The top loser of the day was consumer goods maker Hindustan Unilever, which plunged 3.26 percent to close down at Rs.232.95. Rival ITC slipped 1.26 percent.

Auto makers Mahindra & Mahindra and Maruti Suzuki tumbled 3.15 percent and 1.12 percent respectively.

Technology outsourcers Wipro and TCS sank 2.80 percent and 0.26 percent respectively.

Other major losers were ONGC (down 2.42 percent), NTPC (down 1.30 percent) and BHEL (down 1.26 percent).

The BSE Midcap and Smallcap indexes continued to outperform the benchmark index, jumping 1.69 percent and 1.66 percent to close up at 3358.35 and 3767.55 respectively.

Among the sectoral indices, the biggest gainers were Realty (up 5.42 percent) and Metal (up 3.72 percent) while FMCG (down 1.36 percent) and Auto (down 0.87 percent) dragged.

In the broader market, 1783 advances outnumbered 789 declines while 78 closed unchanged.

Elsewhere, the broader 50-share S&P CNX Nifty index of the National Stock Exchange (NSE) slipped 0.03 percent or 0.90 point to close down at 3342.05.

The Indian markets would remain closed for a holiday on Friday, and trading would resume on Monday before another holiday on Tuesday.

According to market analysts, the bullish markets are showing signs of cooling down and next weeks investors could take flight ahead of the corporate earnings announcements and general elections.

"I think the market has run up for the moment... the kind of volatility which was there today is either seen at the top of the market or at the bottom of the market," said Gajendra Nagpal, CEO at brokerage Unicon Financial.

"Since the market has risen so much, it could well be the end of the upside. It may correct from here or move sideways because the factors which were there behind this rally are already discounted and now elections and earnings will weigh."

"The recent run-up in the market had caught short-sellers on the wrong foot who were forced to cover short positions. Markets took a breather on expected lines. Moreover, traders were undecisive whether to stay put when the indices touched resistance levels which led to the volatility," said Akash Gopawar, senior analyst at Systematix Shares.

According to brokerage India Infoline, it saw the upward momentum continuing for a few more days till it faces a big hurdle.

"This could be in the form of bad earnings or guidance, unfavorable outcome in the (elections) or fresh bad news from the global markets," the brokerage said in a note.

"The ensuing results season and general elections will have a major bearing on investor confidence in the short term," it added.

While investors are bracing for announcement of losses with the earnings season getting underway on April 15 when IT bellwether Infosys Technologies reports, a month-long voting process in national elections starts the next day.

Analysts warn that India could be heading for a weaker and perhaps short-lived coalition government after the April-May general election, with both major national parties Congress and the BJP - struggling to keep regional allies.

"Pre-poll alliances are not pointing to a strong coalition after the May-09 polls. While the probability of a Third Front government remains low, even a weak Congress-led coalition can hurt business sentiment and hold back portfolio flows," said foreign brokerage CLSA Asia-Pacific Markets, in a report.

Agrees Ambareesh Baliga, vice president at Karvy Stock Broking. "The worst (probability of a Third Front government) is behind us. But, that doesn't mean that we can ignore elections. I doubt whether any particular party will have a majority," Baliga said.

"Looking at that kind of a scenario, I don't see any reason why the market should continue moving up," he added.

Meanwhile, data showed India's factory output in February fell for the third time in five months, impacted by the global slowdown, while inflation continued its journey towards zero, declining to a three-decade low of 0.26 percent for the week ended March 28.

Elsewhere in Asia, the markets closed firm. Japan's Nikkei 225 surged 3.74 percent to 8916.06; Hong Kong's Hang Seng rose 2.95 percent to 14,901.41; China's Shanghai Composite advanced 1.38 percent to 2379.88; Taiwan's Taiex soared 4.12 percent to 5667.80; South Korea's Kospi jumped 4.30 percent to 1316.35; and Singapore's Straits Times moved up 2.50 percent to 1828.51.