The Hindu : Business : Sensex rebounds 70 points

Online edition of India's National Newspaper
Wednesday, Oct 27, 2004

Business

Business

Sensex rebounds 70 points

MUMBAI, OCT. 26. Overcoming a brief resistance during midsession, the market today bounced back and ended up 70 points on fairly heavy buying support from operators and retailers even as the central bank kept the Bank Rate unchanged at 6 per cent while raising the repo rate.

The BSE benchmark 30-share index had fallen back to the intra-day low of 5558.14 during midsession after initial smart rally, but later made a strong turnaround and ended at 5651.09 against yesterday's close of 5581.49, a net gain of 69.60 points or 1.25 per cent.

Discounting the Reserve Bank of India's projections of lower growth and higher inflation for this fiscal, market players resorted to shortcovering after the apex bank kept the Bank Rate unchanged at 6 per cent contrary to market fears of a hike in the interest rate.

The RBI scaled down economic growth projections to 6-6.5 per cent from 6.5-7 per cent and sharply raised inflation estimates to 6.5 per cent for the current fiscal.

It also raised the repo rate by 0.25 percentage point to 4.75 per cent to tame inflation in its busy season Credit and Monetary Policy.

The fall in oil prices to below $55 a barrel during trading session also provided a respite to the market.

Enthused by continued flow of encouraging quarterly results, operators covered their short positions ahead of the expiry of October contract in the Futures and Options on Thursday, brokers said.

Foreign institutional investors, who reported net sales of Rs. 184 crores on October 20 and 21, were believed to be buyers in select blue chip counters.

Reliance Industries scored impressive gains on heavy buying prompted by the company's announcement of better-than-expected working results for the quarter ended September 2004 while L&T dropped sharply on heavy sell-off despite excellent quarterly results. — PTI

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