Scrips bounce back as bulls take the ring

Scrips bounce back as bulls take the ring

Sensex gains 272 points after 6-day rout

Scrips bounce back as bulls take the ring

The rebound in the day was quite broad based as 11 out of 13 sectoral indices on the Bombay Stock Exchange were in green, while the popular Sensex regained the psychological 17,000 mark after rallying over 1.6 per cent.  Also, NSE’s volatility index, India VIX, dropped to 28.95 per cent from its close of 34.88 per cent on Tuesday.

Back in Dalal Street, the BSE Sensex jumped 272.60 points or 1.62 per cent to settle at 17,130.51, which is its highest closing level since August 5, 2011. It surged 398.55 points at the day's high and rose 164.34 points at the day's low.

The 50-unit S&P CNX Nifty was up 88.15 points or 1.74 per cent to 5,161, its highest closing level since August 5, 2011. The Nifty hit a high of 5,197.95 in intraday trade.

The rally, led by short covering, was on expected lines as the market was in deep oversold territory, which saw the Sensex shedding 1,456 points in five sessions.

For one, the latest Federal Reserve’s move had raised expectations of increased fund flows into high-yielding emerging markets such as India which in turn boosted investor sentiments in Dalal Street.

Sectors like technology, metal, realty, capital goods and financial that were hammered mercilessly in the fall saw good buying interest this day.

Motilal Oswal Financial Services’ Director Raamdeo Agrawal said “....this recovery which is starting today should continue and should become stronger in as many days. It might be a slow recovery but we will see more stabilised and somewhat better market going ahead.” He believes, whatever rally comes, Nifty will trend within a band of 5,000 to 5,700.

However, a volatile European market and fragile US index futures kept investors on the edge of their seats in the last hour of trade.

European markets like France’s CAC, Germany’s DAX and Britain’s FTSE, which gained 1.5-2.7 per cent in initial trade, were trading 0.7-2 per cent higher at the time of closing of domestic equities. Dow Jones futures too cut its losses from 135 points to 55 points.

The market also came off its intra-day high on recovery in crude oil prices.  Brent crude was trading at US$106.2 a barrel, up US$3.8.

The market breadth, indicating the overall health of the market, was quite strong with as many as 2,225 shares on BSE advanced while 727 shares declined and a total of 82 shares remained unchanged.

Broader indices wise, the BSE Mid-Cap index rose 2.31 per cent and the BSE Small-Cap index gained 2.46 per cent, both have outperformed the Sensex. The combined turnover of bourses was more than
Rs 1.4 lakh crore this day.