The Hindu Business Line : `Original' reformer's return cheers markets

THE securities markets bounced back to "comfortable" levels today on the expectation of Dr Manmohan Singh, "the original reformer", becoming the Prime Minister.

The Sensex opened strong and shot up to 5,052 by 10.15 a.m. from Tuesday's close of 4,877.

The indices were propped up by the sense of stability in Dr. Singh's approach to reforms, said a broker. The Sensex gained 2.65 per cent to close at 5,006.

The Nifty also opened 43 points up and went on to touch 1,575 before the mid-morning fall to 1,527. The index gained significantly in the afternoon to close at 1,567, up 4.25 per cent.

Despite the strong start, the markets did drop by 11:15 a.m.

This was largely attributed to the news item that over 200 Congress MPs in the Lok Sabha and Rajya Sabha had resigned in order to persuade Ms Sonia Gandhi to take up the post of Prime Minister.

The downward movement was later corrected on confirmations that Dr Manmohan Singh has been chosen for the top post.

ONGC, BHEL, TISCO, Tata Power were big gainers among the index stocks.

BHEL ended up by 14.76 per cent while Tata Power gained over nine per cent. Some 3.96 crore shares worth totally Rs 1,572 crore were the registered volumes for the day.

The NSE also registered reasonable volumes - 30.7 crore shares were traded at a value of Rs 5,310 crore.

Wipro, Reliance Energy, ITC, ABB were among the top losers for the day. Brokers said that these scrips witnessed a lot of profit booking.

Banking stocks were also on the upsurge today. The Reserve Bank of India (RBI) leaving the key interest rates untouched in the credit policy announced on Tuesday provided a positive fillip to these scrips.

Oriental Bank gained over 18 per cent, followed by Bank of Baroda at 17.7 per cent.

Canara Bank, J&K Bank, Union Bank all closed with double-digit percentage gains.

Brokers insisted that the markets would continue to be choppy all week.

"There will not be a sustained large trend. Investors are trying to buy at lower levels and book some profits as soon as possible," said Mr Hormuz Maloo, Geojit Securities.

FIIs were net sellers to the tune of Rs 227.5 crore, according to trade data for Tuesday released by the SEBI. Mutual funds had also registered net sales figures of Rs 23.6 crore for the day.

Analysts are of the opinion that fresh buying should be scrip and sector specific.

"There is no point investing too much money until the political situation is completely clear. Last week, this time, we did not even anticipate the kind of events that the markets faced on Friday and Monday. Bottom-feeding is good but must be backed by fundamentals," said a technical analyst.

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