Sensex rises 151 points to end above 16,000
A sudden spurt of buying towards the fag end of trading, sparked by the government's decision on Thursday to divest 10 per cent in all listed companies, pushed the benchmark Sensex up by more than 150 points to regain the 16,000-level after three days.
Markets turned bearish in early trade after yesterday's rebound rally on weak cues from Asia and plunged to 15,564 points. Sentiment, however, turned bullish within minutes of Home Minister P Chidambaram announcing the Cabinet decision to divest 10 per cent stake in all listed companies. Government also decided to list all profit-making public sector firms with a positive networth.
After a roller-coaster ride, which saw the Sensex swinging over 500 points, the 30-share index finally closed the day at 16,063.90, netting a rise of 151.77 points or 0.95 per cent over its previous close.
Small-cap and mid-cap stocks attracted brisk buying with their indices rising by 1.82 per cent and 2.02 per cent.
Shares of the telecom companies were flavour of the day. Brokers said reports of government planning to reduce licence fee for telcos attracted heavy buying in these stocks. Sensex stocks Reliance Communications and Bharti Airtel posted impressive gains of 5.34 and 4.50 per cent respectively.
"The market is in a pull-back mode as it has witnessed vertical sell off in the earlier sessions. It is more of a bounce back kind of a trend. The long term uptrend is still intact and investors should put in money in the index stocks at every lows," said Kotak Securities Vice President Technical Research Shrikant Chouhan.
Sensex jumped despite weak Asian indices following Wall Street closing lower overnight. US Fed Reserve yesterday projected a mute recovery in the largest economy which saw the dollar recovering and stocks sliding.
Weak sentiment was reflected in Asia with the Nikkei closing down 1.29 per cent and the Kospi 1.75 per cent. European markets too were down by about 0.50 per cent in their morning trading.
Discarding global trends, broader 50-share Nifty of the National Stock Exchange also firmed up by 54.75 points or 1.16 per cent to close at 4,765.55.
Kotak's Chouhan said as the rupee starts appreciating and with no major bad news on the global front liquidity would pour into the market again.
Reliance Infra ended the day as the biggest gainer among Sensex stocks at 5.59 per cent. Aluminum major Hindalco was big winner at 5.08 per cent. Auto major Mah&Mah at 3.56 per cent, Tata Steel at 3.28 per cent, BHEL at 2.47 per cent, Hero Honda at 2.31 per cent were the other prominent winners.
India's largest public sector bank SBI, however, lost 1.14 per cent
Market breadth remained strong with 1,827 gainers against 841 losers following widespread advances in the mid-cap and small-cap segments.
The trading volume was high at Rs 5,972.13 crore compared to Rs 5,142.75 crore on Wednesday. Infosys Technologies was the most active share with highest turnover of Rs 485.78 crore.
