Riding high on a remarkable increase in net direct tax collections and a modest fall in current account deficit, the stock market on Thursday bounced back with a vengeance and ended 269 points up at 13,630.71.
The market sentiment was partly aided by Infosys Tech's third quarter earnings and the revenue guidance for 2007, which turned out to be as per market expectations.
Investors hectically covered their short-sold positions in the past three sessions after Infosys surprised the market with steady performance results contrary to fears that the company may not live up to the market projections.
Shortcovering was accentuated by reports that the net direct collection as on December 31, 2006 has surpassed the targeted growth of 27.5 per cent over last year. The net direct tax collections stood at Rs 1.44 trillion, up 41.8 per cent over the previous year.
Investors' positive attitude was also credited to reports about a modest fall in current account deficit, brokers said adding, "Foreign Institutional Investors (FIIs) were believed to be discouraged by high current account deficit earlier."
The Bombay Stock Exchange (BSE) 30-share sensitive index (Sensex) surged strongly to the intra-day high of 13,667.80 after a weak start and later ended the day at 13,630.71, a net rise of 268.55 points or 2.01 per cent over the previous close of 13,362.16. The Sensex had fallen by 652.76 points or 4.66 per cent in the last five days.
The broader S&P CNX Nifty of the National Stock Exchange (NSE) recovered by 91.95 points or 2.39 per cent to 3,942.25 from the previous close of 3,850.30.