Mumbai, May 21: Share prices seesawed today as investors anxiously watched for signals on government formation.

The market rebounded from its early low and even posted moderate gains of 29 points at close following a strong turnaround on late buying support from operators coupled with fresh purchases by domestic 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 early stages, later bounced back and closed at 4961.57 compared with yesterday’s close of 4932.11, a rise of 29.46 points or 0.60 per cent.

The recovery was led by PSU stocks which were the victim of political uncertainty and doubts over continuation of economic reforms. Attributing the early sharp slide to the delay in announcement of the common minimum programme (CMP), brokers said operators also resorted to winding up of positions in reaction to the pressure by allies on portfolio allocation.

Statements by Sharad Pawar and Laloo Prasad Yadav, the two regional chieftains from Maharashtra and Bihar, also cooled off anxiety. Some brokers feel NSE’s statement denying that it was a big seller in the market on May 17 perked up sentiments.

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.

The markets had clawed back from the red on Tuesday and Wednesday, posting a gain of more than 500 points cumulatively, but closed lower on Thursday when it lost 74 points.

“Investors are keen to understand what’s in store for them in the CMP. Ministry formation will also be watched,” they said.

Meanwhile, NSE denied that the market crash on May 17 was triggered by margin sales by the exchange.