The Hindu : Business : Sensex rebounds 256 points on fresh buying

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Tuesday, Sep 27, 2005

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Business

Sensex rebounds 256 points on fresh buying

Special Correspondent

Fall in crude prices, rally in global markets aid sentiment

Surge in sensex stocks Software scrips' strong showing `Expiry of derivatives contract may result in volatility'

MUMBAI: The Bombay Stock Exchange sensitive index (Sensex) rebounded sharply by 256 points on Monday, on the back of buying across the board, after being battered last week due to negative news reports. The sensex witnessed a sharp fall of 265 points on September 22.

The benchmark BSE 30-share sensitive index rose by 256 points or 3 per cent to close at 8479 and the 50-share NSE Nifty gained 89 points or 3.2 per cent to close at 2557. All sensex stocks closed in the positive territory.

Among the sectors, automobile, technology, bank, metal, cement and pharmaceutical stocks made smart gains.

Last Thursday, the sensex crashed by 265 points, on reports by a section of the press that the Prime Minister's Office swung into action along with the central regulatory and investigating agencies to look into the surge in stock indices.

Referring to the recent negative media reports on stock market movements, Prime Minister, Manmohan Singh, reportedly asked reporters on Saturday to do some soul-searching on the objectivity of their reports.

These reports gave a new vigour to the market sentiment and fresh funds started flowing into the market, especially from foreign institutional investors.

"The sharp recovery is on account of continuous fund buying and reduction of over leveraged position at the retail level over the last weakened," said Rahul Rege, Head of Research (Equities), Sharekhan, a securities trading and research firm. Moreover, significant fall in crude oil prices and rally in the global markets aided sentiment.

"The market has bounced back strongly in Monday's session. This should certainly restore confidence among participants.

"However, factors such as expiry of derivatives contracts, due this week, may result in volatility," stated Motilal Oswal Securities.

On the outlook for the market it further stated that, "We suggest investors use a selective valuation-based approach as the indices enter into uncharted territory."

Software scrips put up a strong showing. Satyam Computer Services rose by nearly five per cent to Rs. 545.25.

Wipro gained by 4.9 per cent to Rs. 375, TCS by 4.2 per cent to Rs. 1472 and Infosys by 3.4 per cent to Rs. 2,484. L&T gained 4.2 per cent at Rs. 1,430.

State Bank of India firmed up by 3 per cent to close at Rs. 915 on reports that it has floated new schemes to retain part of the $5.5 billion (RIBs) that will mature in December 2005, to help fund its growing overseas operations.

Among other front-line stocks, Reliance Industries surged by 4.30 per cent to Rs. 780 and ITC by 3.92 per cent to Rs. 142. Among oil stocks, ONGC gained three per cent at Rs. 1,020.

NTPC, Maruti, Bharti Tele, BHEL, Tata Power, HDFC, HLL and Gujarat Ambuja moved up sharply. MRF, Ruchi Soya, Chemplast Sanmar and United Breweries hit the upper circuit breaker.

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