Stocks

Markets bounce back on better US growth prospects

Our Bureau Mumbai | Updated on August 29, 2011 Published on August 29, 2011

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The BSE Sensex more than made up for the 492 points (3.01 per cent) decline it saw through the whole of last week, by climbing up more than 600 points intra-day on Monday.

Analysts said that a bounce-back in the market was expected after the fall through whole of last week. “The markets had been falling severely without rationale. What we call hot money or the hedge fund money today came into the market in a concerted way. Most of the short-covering positions have been compelled to go long. However, volumes have been very thin,” said Mr Prakash Diwan, Head of Institutional Client Group, Asit C Mehta Investment Intermediates.

The Sensex ended the trade on Monday at 16,416.33, up 567.50 points (3.58 per cent) from its previous close of 15,848.83. The Nifty was up 3.6 per cent or 171.80 points to close at 4919.60.

The highest the Sensex touched during the day was 16,462.03, which is up 613 points from its previous close.

The BSE saw very thin volumes of Rs 1,849.88 crore on Monday, almost half of its 52-week daily average of Rs 3,711.10 crore.

Long positions being taken on account of the market being in the oversold zone boosted sentiments, say experts. Both exchanges on Monday together saw FIIs buying in the net at Rs 366.19 crore, while the DIIs were net sellers at Rs 325.50 crore. The retail investors on the BSE were net sellers at Rs 48.36 crore.

The buoyant mood in the market, according to experts, was linked to the speech given by the US Federal Reserve chief, Mr Ben Bernanke, indicating better growth prospects for the US economy in the second-half of the year. This pushed up global markets.

A total of 2,121 scrips advanced on the BSE while 716 scrips declined. Among the Sensex stocks, the TCS scrip gained the most at 7.32 per cent, followed by Jaiprakash Associates at 6.92 per cent and Jindal Steel at 6.75 per cent.

Published on August 29, 2011
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