The Hindu Business Line : Bulls roar back as Sensex scores record 1,139-point rally

Mumbai, Jan. 24 The bulls appeared to roar their way back into the markets on Friday which saw the Sensex and the Nifty make their highest ever gains, of 6.6 per cent and 7 per cent, respectively.

FIIs turned net buyers for the first time after the heavy selling that marked their transactions since January 16.

The BSE Sensex registered a record breaking 1,139 points gain, surpassing the earlier highest single day gain of 894 points on November 14, 2007. It closed well above the 18,000-level.

Market watchers attributed the rise to the brighter sentiment displayed by the global markets and to the belief that the Indian market had bottomed out.

“FIIs and institutions bought frontline stocks, in a thinly traded market. We believe the market has tested the bottom this week and will build on that base,” said Mr Amitabh Chakraborty, President-Equity, Religare Securities.

“The PSU banks’ closure on Friday also provided one more day to the investors to pay for the stocks bought, a relief for the liquidity-starved market,” Mr Madhukar Sheth, a BSE Member, said.

It was a one-way rally through the day, the Sensex opening with a positive gap of 282 points.

“Our market drivers – such as the GDP growth potential, optimism about the Budget and stronger corporate numbers – remain unchanged,” said Mr Dinesh Thakkar, CMD, Angel Broking adding that the Federal rate cut has raised hopes for an interest rate revision by the RBI.

This interest rate cut expectation boosted the realty, bank and automobile stocks. The BSE Realty index gained 10.41 per cent; Bankex 7.53 per cent , and Auto 6 per cent. The Metal index was another big gainer, rising 9.73 per cent.

“We are bullish on the interest rate-sensitive sectors, especially automobile, banks, and real estate, as we believe the RBI might cut the rate to maintain parity between the dollar and the rupee,” Mr Chakraborty said.

Market sources said that refunds had indeed started coming in from the Future Capital Holding IPO that concluded on January 16 and fetched a subscription of 132 times, but brokerages would not confirm this.

Foreign investors were net buyers by Rs 208.48 crore on Friday as per the provisional BSE and NSE composite data.

During the recent market meltdown, FIIs were net sellers of equity worth Rs 14,354.70 crore between January 16 and 24 as per the latest SEBI data.