Software stocks were back in favour and value buying in some frontline index stocks pushing the benchmark indices BSE Sensex up 3.3 per cent at 18,233.42 and Nifty by 3.5 per cent at 5317.25.
Software stocks were back in favour and value buying in some frontline index stocks pushing the benchmark indices BSE Sensex up 3.3 per cent at 18,233.42 and Nifty by 3.5 per cent at 5317.25. A strong rally in the technology stocks followed by banks and metals helped markets snap four day losing streak.
Sentiment was better with Wall Street posting gains and the markets opened on a fresh slate after the troubled January derivatives trading settlement was completed on Thursday. "There is fresh buying before the budget. While institutional buying was apparent retail investors are yet to return," said Ramesh Patel, JNP Shares and Securities.
CNX IT index was the biggest gainer of the day at 6.15 per cent as Satyam gained 8.2 percent, Infosys 5.8 per cent and TCS 6.2 per cent. Valuations of technology stocks based on the price to earnings ratios have become cheap after the recent lows the stocks had hit.
Concerns on rupee appreciation and the impact of recession in the United States still remain though the prices of stocks appear attractive at these level, say some analysts. "It is still an open call on the industry," said Sanjay Sinha, chief investment officer, SBI Mutual Fund.
Future Holdings listed on Thursday at Rs 1,081 against the issue price of Rs 765 and the share closed at Rs 909 after hitting a day's low of Rs 825. The opening has been subdued compared to the unofficial premium the share was commanding when the issue opened.