The Hindu Business Line : Sensex gains 700 points as markets bounce back

Stock markets, which lost heavily in the last three trading sessions, bounced back on Wednesday, mainly on buying support from domestic institutions and proprietary traders.

Positive news on the political front, strong opening of the European markets and short covering brought buyers back to the badly battered market, said analysts.

Indian equity markets rose by more than five per cent today when other Asian markets closed in the red – something that surprised analysts.

Sensex and Nifty had lost around 10 per cent in the previous three sessions.

Tracking the weak Asian markets, Sensex opened lower at 12,948 and dipped further to 12,822 intra-day, before the dramatic turnaround in the afternoon session.

The index gained 703 points to end the day at 13,664.62. The broader Nifty also regained the 4,000-level to close at 4,093.

“Today’s recovery has to be seen just as a reaction after such a big fall. Investors are expected to wait and watch as it is not a rally. There may be some institutional buying,” said Mr Mahesh Thakkar, a financial analyst.

“I don’t know the sources of money, but valuations had become attractive. These are times when worries are not behind us, but its time to do some stock picking,” said Mr R. Balakrishnan, ED, Centrum Broking.

The domestic institutional investors were net buyers at Rs 421 crore but FIIs were again net sellers at Rs 668.43 crore, as per the BSE-NSE provisional data. As per the BSE data ‘proprietary traders’ also bought shares worth Rs 116 crore.

The buyback announcement by the Delhi-based developer DLF also brought some cheer to the market. DLF, which gained around 19 per cent intra-day, closed 15 per cent up. BSE Realty index was the biggest gainer at 12.22 per cent.