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Our Bureau

Mumbai, Dec. 12 Indian equities tanked on Friday on news of the collapse of the US auto bail-out package, but bounced back to close on a flat note as traders covered their short positions.

The Sensex was down more than 400 points from its previous during mid-day trade, but closed up 0.46 per cent at 9690; the Nifty was up 0.04 per cent at 2921.

Foreign institutional investors were net sellers of equity on Friday for Rs 16.52 crore whereas domestic institutions were net buyers for Rs 325.81 crore.

The failed US auto bail-out package pushed markets down globally, triggering a sell off in the Asian markets, including the domestic markets, said Mr Alex Mathew, Head of Research at Geojit Financial Services. However, the domestic markets started inching upwards as traders started to cover their short positions, said marketmen. “A good amount of buying emerged in the afternoon session in majors like Reliance Industries and DLF which pulled up the market to close in the green,” said Mr Mathew.

Buying was seen in the mid-cap and small-cap scrips which could have also helped boost the benchmark indices, as some of the buying spills over to the larger stocks, said Mr Harendra Kumar, Head of Research at Centrum Broking. The BSE Midcap index was up 1.58 per cent and the small-cap index up 2.54 per cent.

The markets managed to snub news of the decline in the Index of Industrial Production (IIP). The IIP growth for October was a negative 0.4 per cent; the first contraction since the index began in fiscal 1994.

However, the IIP numbers were in line with market expectations, which is why it did not affect our markets much, said Mr Kumar.

The markets here have fallen to such low levels that a drop in the IIP numbers or inflation data cannot impact them that great an extent, said Dr Soumendra K. Dash, Chief Economist, CARE Ratings.

The realty index was the best performing of the sectoral indices on the BSE. This was followed by the consumer durables, oil and gas, and bankex indices. The BSE IT and Teck indices were the worst performers. DLF led the list of gainers on Friday, gaining close to eight per cent. Reliance Infrastructure, Reliance Communications and Reliance Industries were also among the top gainers. Among IT stocks, TCS and Wipro were the worst performers. The market breadth was positive as 1,547 scrips advanced while 851 scrips declined.

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