The Hindu Business Line : Markets recover sharply

Star performers
Reliance Industries shot up by 11.74 per cent or Rs 96.95 to close at Rs 922.10. Reliance Energy (up 14.95 per cent to Rs 433.50) and Grasim Industries (up 13.57 per cent to Rs 1775.55) were the biggest gainers on Sensex.

Mumbai , June 9

Led by index heavyweight Reliance Industries, the stock market staged a smart rebound on Friday, ending a four-day losing streak, with the BSE Sensex recording its biggest single-day gain since March 1992.

After losing 1,155.55 points in the first four days of this week, the bellwether BSE 30 Sensex rose by 514.65 or 5.54 per cent on Friday to 9,810.46 on value buying, short covering, re-entry of foreign funds and gains on global equity markets. Dealers said Friday's recovery looked set to continue at least in the next couple of sessions if the global cues remain unchanged. Total market capitalisation on BSE rose by Rs 1.32 lakh crore following the rise in share prices.

NSE's S&P CNX Nifty Index rose by 123.6 points or 4.54 points to 2,866.30.

Despite the gain, Sensex ended the week with a loss of 641.37 points compared to last Friday's close.

Reliance Industries shot up by 11.74 per cent or Rs 96.95 to close at Rs 922.10. Reliance Energy (up 14.95 per cent to Rs 433.50) and Grasim Industries (up 13.57 per cent to Rs 1,775.55) were the biggest gainers on Sensex. Stocks such as Jindal Stainless, Mastek, Kotak Bank, Mphasis and Engineers India posted gains in the range of 24-20 per cent.

All the indices ended in the green with BSE Oil & Gas Index (up 8.62 per cent), BSE Metal Index and BSE Capital Goods (6.64 per cent) becoming the biggest gainers. All the 30 Sensex stocks ended in the green. The overall market breadth was also positive at 1,596 advancing stocks compared to 830 declines.

Mid and small-cap stocks, which were hammered in the last four days, recovered on strong buying in select counters, dealers said. BSE Mid-Cap Index and BSE Small Cap Index rose by 5.69 per cent and 4.57 per cent, respectively.

"It's time to start stocking up," Edelweiss Securities said in a note to investors, pointing out that "Index and large cap stock prices have corrected by 30-50 per cent, mid and small caps by 40-70 per cent; price levels are now very attractive."

Foreign funds, which triggered the current correction after selling over $2.2 billion worth stocks in the last few weeks, have started making fresh purchases at lower levels.

Bond prices crash

Bond prices crashed by nearly a rupee as a reaction to the RBI's `surprise' hike in key-short term interest rates. While bond dealers expect prices to recover by Monday, the debate on a possible rate hike in July has now begun among market participants.

The 7.59-10 year-2016 paper ended at Rs 98.62 (7.79 per cent YTM), down from Thursday's close at Rs 99.4 (7.67 per cent YTM).

Mr R.V.S. Sridhar, Vice-President (Treasury), UTI Bank, said the bearish sentiment might continue for a while, given that global interest rates were also headed north.

"A yield of 7.8 per cent is attractive for long-term investors such as insurance companies and pension funds. So, the fall might be just temporary," said Mr Sampath Kumar, Vice-President (Treasury), IndusInd bank.

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