The Hindu Business Line : Markets rebound

Opening weaker, stock prices fell sharply along with the falling NDA tally pushing the Sensex down by 227 points in the early hours of trading. But in an hour's time, the Sensex showed signs of a resurrection. The market's worst fear of a hung Parliament was replaced by the trend that the Congress might win a significant lead.

This, coupled with the fact that a lot of players had taken short positions and were looking to cover it, aided the Sensex. Brokers said the fact that the Congress was the initiator of reforms and the talks of the possible return of Dr Manmohan Singh as the Finance Minister boosted the market sentiment.

At 11:05 a.m., the Sensex moved into green and touched 5379, up 21 points from Wednesday's close of 5358. The index swung wildly and the market remained volatile yet range-bound, throughout the day, closing at 5399, up 41 points — a gain of 0.77 per cent.

At NSE, trends were similar, the S&P CNX Nifty dropped to 1625 from Wednesday's close of 1711, on opening. By 10: 01 a.m., the index had begun climbing. The Wednesday's values were breached by 11:04 a.m. and index had a jagged-edged climb to close the day at 1717, a marginal 0.37 per cent rise.

Blue chips such as Reliance, Bajaj, Grasim, Ranbaxy, Infosys, Bharti, etc posted 2 per cent to 4 per cent gains on Thursday. Overall 945 scrips posted gains while 682 declined in the BSE. Volumes were high at both exchanges. Shares worth Rs 3,254 crore changed hands on BSE, and Rs 6,886 crore on NSE.

Brokers attributed the day's volatility and eventual positive closing to the fact that there have been erosions in the market in the last few days and a lot of scrips have come into attractive price ranges. The political concerns were diminished by the fact that the leading party's position was not fragile enough to require many alliances. "The markets want stability and this mandate, while unexpected, is not really unwelcome," said a broker at BSE.

From the FII perspective, Indian markets' performance in the next few weeks would have a significant impact on inflow of FII money, as there is a relative comparison with other emerging markets.

"Emerging markets may not give positive returns over the next few weeks and if we under perform some of these markets, there could be a threat," said Mr Jyotivardhan Jaipuria, Head of Research, DSP Merrill Lynch Ltd.

Technology and pharmaceutical scrips were on an upswing today. The concerns of the market that the new government, especially if it partners with the Left Front, might slow down the process of disinvestments led to the PSU index losing over 107 points. Brokers feel that while the market on Thursday bucked the predicted trend, this cannot be taken as an indication of the fact that markets will remain robust over the next few days.

More Stories on : Stock Markets | Stock Markets

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Will Left be right for reforms, corporatedom asks

Shell-shocked NDA coalition bows out — Congress emerges as single largest party; to elect leader today

Pro-reform Govts faced the wrath, says Naidu

IT sector: Language skills in keen demand

Disinvestment blues for PSU stocks

Markets rebound

FIIs may look for stability