The Hindu : Business : Sensex shoots up on hectic FII shortcovering

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Thursday, Sep 14, 2006
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Sensex shoots up on hectic FII shortcovering

MUMBAI: Buoyed by amendment of regulations on foreign institutional investors (FIIs), key indices on the bourses on Wednesday surged by two per cent, extending their gains to a second day in a row.

The Bombay Stock Exchange 30-share sensitive index (Sensex) opened strong at 11723.78 and gradually moved higher to the intra-day high of 11938.41 before closing at 11893.79 against Tuesday's close of 11660.79, a net rise of 233 points or two per cent. On the National Stock Exchange, the S&P CNX Nifty rose by 64.65 points or 1.91 per cent to 3454.55.

The Sensex has almost recovered its Monday's losses in the last two sessions.

Sentiment was also aided by firm Asian advices and a remarkable industrial growth in July.

The Securities and Exchange Board of India (SEBI) has amended the regulations on FIIs to give FII status to overseas-registered or incorporated pension funds, mutual funds, investment trusts, insurance companies, reinsurance companies, international or multilateral agencies, foreign governmental agency or a foreign central bank.

The FIIs, who have been heavy sellers in the derivatives segment since September 5, were engaged in shortcovering of positions. They had reported withdrawals of Rs. 2,854 crore from the Futures and Options (F&O) segment in the last six sessions.

Commenting on the amendment, brokers said this was a positive development for the market, which was expected to get a boost in next few days.

Bank, PSU and IT stocks hogged the limelight on hectic FII purchases. — PTI

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