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Sensex soars 341 points at close

The benchmark index closed higher at 10,822.78 on the Bombay Stock Exchange on emergence of buying by domestic and foreign funds.

india Updated: May 23, 2006 17:27 IST

After sinking dangerously for three straight sessions, the stock market looked healthy on Tuesday with the key index gaining a huge 341 points, as foreign and domestic funds purchased shares under the watchful eyes of regulator SEBI.

Foreign Institutional Investors (FIIs), which were mainly blamed for the abnormal crash, as well as domestic funds were behind Tuesday's salvage operation, having made heavy purchases.

However, a few brokers continued liquidation of long positions in a bid to reduce margin pressure.

Market regulator Securities and Exchange Board of India (SEBI) also continued its surveillance and held meetings with mutual funds and stock exchange officials to take stock of trading during the day.

The market stabilised after mid-session and the Bombay Stock Exchange (BSE) 30-share sensitive index (Sensex) spurted by 341.01 points or 3.25 per cent to end the day at 10,822.78.

The Sensex had fallen by 1,736 points or 14.21 per cent in the last three sessions. In terms of correction, it had dipped from an all-time high of 12,671.11 of May 11 to the intra-day low of 9,826.91 on May 22, a drop of 2844.20 points or 22.45 per cent.

The National Stock Exchange's (NSE) S&P CNX Nifty jumped by 118 points to 3,199.35 from previous close of 3,081.35.

FIIs were continued buyers in the Futures. They pumped in a huge Rs 1,914.57 crore in futures on Monday but pulled out about Rs 872 crore from Cash segment.

Steel stocks were in demand in afternoon trade after a Chinese steel major announced it might hike prices. Steel Authority of India was the major gainer, with its stock trading up 14 per cent at Rs 76.40.

Mutual funds and financial institutions made heavy purchases of Rs 1,611 crore during the stocks carnage on May 18 and 19.

A strong pull-back rally in metal prices and the NSE's announcement of smooth pay in and pay out in respect of securities and funds in both Cash and derivatives segments had a sentimental impact on the market.

Expecting the volatility in the market to continue till the F&O settlement of margin accounts, Nimesh M Kampani, CMD of JP Morgan Stanley said "technically, the market was weak but fundamentally, it looked strong" adding that there is no payment crisis in the market.

He said a sharp correction has come and stocks were available at 20 to 30 per cent discount, Kampani added.

A bounce in metal stocks could be gauged by a remarkable rise of 594.31 points or 7.35 per cent in the metal index, which settled at 8,683.33 over last close of 8,089.02.

The broad-based BSE-100 Index recouped by 192.01 points to 5,574.23 from previous close of 5,382.22.

The BSE-200 Index and the Dollex-200 were quoted sharply up at 1,330.60 and 486.98 at close compared to last close of 1,283.84 and 467.97 respectively. The BSE-500 Index soared by 142.36 points to 4,280.26 from previous close of 4,137.90 and the Dollex-30 ended higher at 1,953.28 from 1,884.07.

The volume of business, however, continued to be low at Rs 3,819.73 crore. RIL remained the top traded scrip with the highest turnover of Rs 309.14 crore followed by Bharti Tele-Ve (Rs 270.08 crore), Tata Steel (Rs 106.10 crore), Infosys Tech (Rs 104.45 crore) and Mahindra Gesco (Rs 96.18 crore).

First Published: May 23, 2006 10:18 IST