Bulls buoy bourses as bears take a breather

Sensex spurts 200 points as crude oil prices skid

The BSE Sensex on Monday jumped 200.03 points or 1.24 per cent to close at 16,341.70 points, while the 50-unit S&P CNX Nifty at NSE gained 53.15 points or 1.10 per cent to settle at 4,898.80 in the day’s closing.  Broader indices wise, the BSE Mid-Cap index rose 1.25 per cent and the BSE Small-Cap index gained 1.54 per cent, both the indices outperformed the Sensex.

The market breadth was strong and scrip-wise, index heavyweight Reliance Industries (RIL) surged followed by State Bank of India and Tata Motors who recovered from thier 52-week lows. Infrastructure stocks rose on bargain hunting after recent slide, while bank stocks were mixed.

Software scrips extended recent steep losses triggered by concerns that a likely economic slowdown in the US and Europe will hit technology spending by overseas clients, with IT major Infosys hitting 52-week low.

European shares and US index futures rose on hopes for lower oil prices ahead as rebels moved into Libya’s capital. The front-month October Brent crude contract on London's ICE futures exchange fell $1.22 to $107.40 a barrel, while Nymex crude futures rose 90 cents in electronic trade to $83.16 a barrel.

Meanwhile, gold surged to a fresh all-time high of Rs 28,540 per 10 grams in the bullion market this day on sustained buying by stockists and investment-driven purchases fuelled by the bullish trend in international markets.

Earlier in the day, the Sensex touched a low of 16,046 amidst volatility as weakness persisted in interest rate sensitive stocks. However, a recovery in the European markets and buying in oil and gas stocks helped the index to recover over 320 points and touch a high of 16,370.

Analysts expect market to remain volatile this week as traders rollover their positions on Thursday -- derivatives contracts expire on August 25, 2011. BSE clocked turnover of Rs 2005 crore, slightly lower than Rs 2014.36 crore on Friday last.

Further, trading in US index futures indicated that the Dow could gain 112 points at the opening bell on Monday, even as US stocks closed lower on Friday last and notched their fourth straight losing week, as investors continued worrying about a potential global recession and the health of the European banking system.