Regulators’ speak propped up the equity market from its early morning depths on Tuesday, defying the negative sentiment prevailing in the global markets arising from the global credit crisis.
The BSE Sensex opened with a loss of about 418 points and slipped further. But recovered all the losses and closed with a gain of 261 points at 12,857, after Securities and Exchange Board of India chairman CB Bhave assured that short sales by institutions will not be banned.
“Rumours of a possible cut in cash reserve ratio also boosted the market sentiment,” said Ambareesh Baliga, vice-president and head-research, Karvy Stock Broking. Reserve Bank of India assurance on the robust capital base of ICICI Bank catapulted the stock to the top gainers position in Sensex.
It gained 8.4 per cent to Rs 535. Earlier, there were reports of panic withdrawal of deposits from the bank at some places.
Tuesday’s recovery may not be an indicator of beginning of good times. However, there is hope.