The Hindu Business Line : Sensex gains 223 as market recoups

AFTER three days of continuous fall, the stock market bounced back on Friday on the back of technical correction and clarification by the Securities and Exchange Board of India (SEBI) on Participatory Notes (PNs).

International rating agency Moody's upgrading of India's rating also added to the bullish sentiment leading major stock indices up by four per cent, the highest gains in a single day seen in the last few years.

The market which opened firm on the last day of the week remained stable during the day.

However, rumours in the market that the SEBI will not ban PNs led to a sharp jump in the stock price in the last one hour of trading.

The previous three trading sessions had seen sharp decline in the stock prices in the last one hour of trading.

The clarification by SEBI on PNs came after close.

After losing 470 points in the preceding three sessions, the BSE Sensex ended with sharp gain of 222.90 points, or 3.98 per cent, to close at 5,816.64.

On the NSE, the S&P CNX Nifty Index gained 77.05 points (4.35 per cent) to end at 1,847.55.

The Sensex moved in a 236-point range, touching the day's low of 5,596.56 and high of 5,832.74.

At the end of today's close, the benchmark index had lost 129.55 points for the week.

Bears rushed to cover their short positions, which also led to sharp rise in stock prices.

Moody's decision to upgrade India's foreign currency rating to investment grade also added to the optimism.

Players feel that foreign investment into India will rise in the coming years following the upgrade.

Buying was seen almost across-the-board.

Old economy stocks - automobile, power and cement - rose on renewed buying on improved quarterly results.

Brokers said that the mood was optimistic in the market as SEBI has clarified on PNs.

They expect the market to open firm on Tuesday.

The market will remain closed on Monday on account of Republic Day.

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