Mumbai, Nov. 25: Buoyed by overnight gains on international markets and the ceasefire with Pakistan, equities today sprung back to life amid hopes that foreign institutional investors (FIIs) would continue to repose faith in the local bourses.
This optimism saw the 30-share BSE sensex rise 72 points after yesterday’s negative reaction.
Brokers said while the overnight gains on the Nasdaq led to spirited buying in technology scrips, the sentiment was further boosted by signs of beeter relations with Pakistan. India had yesterday reacted positively to Pakistan's ceasefire proposal along the Line of Control.
India went on to suggest that the initiative be extended to the actual ground position line in Siachen. Brokers feel the initiative could improve FII interest in the country due to enhanced stability in the region.
The stock rebound has come at a time when FII investments have been showing signs of sluggishness over the past few days as the year draws to a close. The prospects of stability in the region may lead to increased allotments from FIIs, brokers feel. Foreign investors have put in a record $5 billion into domestic equities this year.
Mirroring the positive trend, the benchmark BSE 30-share index opened firm at 4845.10, rose to the intra-day high of 4900.21 before closing at 4894.59 against yesterday's close of 4822.15, a net rise of 72.44 points or 1.50 per cent.
Infosys jumped over 2 per cent to Rs 4,733.45 while buying was also witnessed in Satyam which closed higher at Rs 323.45.
However, the buying interest was not confined to technology scrips. Several old economy stocks showed marked improvement on hopes of increased FII investments. These included Reliance Industries Ltd, Grasim, Tata Motors among many others.