The Hindu : Business : Sensex rebounds after early slide

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Saturday, May 22, 2004

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Business

Sensex rebounds after early slide

MUMBAI, MAY 21. The Sensex rebounded from its early low and even posted a moderate gain of 29 points at close following a strong turnaround on late buying support from operators coupled with fresh purchases by Indian financial institutions.

The BSE benchmark 30-share index which had fallen sharply by 127.21 points to the intra-day low of 4804.90 at the early stages, later bounced back and ended at 4961.57 against yesterday's close of 4932.11, netting a rise of 29.46 points.

The recovery was led by PSU stocks, which were the victim of political uncertainty and doubts over continuation of economic reforms.

Attributing early sharp stocks slide to the delay in announcing the Common Minimum Programme to be decided by the Congress and its allies, brokers said operators also resorted to winding up of positions in reaction to the pressure by allies on portfolio allocation.

Operators covered short positions after an initial bout of selling and some of them even created fresh positions in a few blue chip counters, brokers added. Brokers said investors not only were keen to know who gets the Finance portfolio but also awaited announcement of the CMP by the Congress and its allies. Foreign institutional investors who have been net sellers to the tune of Rs. 2,992 crores in the current month till May 19, including Rs. 342 crores in the first three days, seemed to be sidelined. ONGC remained below its offer price of Rs. 712.50 per share for retail investors and Rs. 750 per share for institutions and corporates in spite of late recovery. It ended the day at Rs. 706.55.

PTI

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