Mumbai, Sept. 26: Stocks clawed back last week’s losses in a 256-point sensex surge that was as dramatic as the Thursday thwack that jogged nasty memories of May 17, 2004.
After a week that saw bears crawl out of the woodwork to maul the market, the bulls took charge this Monday morning by lifting indices to previous highs.
Much of the shopping spree in key stocks was inspired by statements from the government over the weekend that it had never intended to tame galloping markets. Assertions from the finance ministry and the Prime Minister’s Office that there was no probe whatsoever into the way bourses had been behaving also soothed nerves.
Pointing out that today’s rise was a relief rally, analysts explained that the market players were also enthused by the remarks of finance minister P. Chidambaram that “there was no scam in the stock market”.
Today’s rally is the sharpest spurt in the benchmark index in a single session since May 18, 2004, when the sensex clocked a gain of 371.86 points. Starting on a strong footing at 8280.06 compared with its last close of 8222.59, the sensex went no other way but northwards. Such was the intensity of the buying that none of the sensex stocks suffered losses. The index touched an intra-day high of 8,487.36 before ending at 8,478.91. This represented an increase of 256.32 points, or 3.12 per cent.
A key highlight of the day was that all indices ended in the green with the BSE small-cap index posting the highest percentage gain. This gauge, battered in last week’s slide, ended at 5870.69 in a gain of 265.23 points or 4.73 per cent.
Brokers say the bulk of the buying came from foreign institutional investors and local mutual funds. Figures released by the Securities and Exchange Board of India (Sebi) showed that FIIs sold a $74.6 million on Friday, when the sensex, after showing extreme volatility, ended flat. These funds have so far pumped in record sums ' $8.5 billion ' into the stock market.
Among the largest gainers on Dalal Street were Reliance Industries, which firmed up more than 4 per cent at Rs 780.50 after opening at Rs 754 and rising to an intra-day high of Rs 784.40. ONGC, SBI, Wipro and Infosys were the other sensex shares that proved to be big draws.
The rupee dipped to 43.96 against the dollar from Friday’s finish of 43.91 as month-end demand for dollars from companies and importers overwhelmed supplies. However, swelling FII flows into shares could turn the tide.