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Markets do about-turn, rise sharply

Our Bureau

MUMBAI, May 24

STOCK markets, after an eight-day fall, took a U-turn in today's trading with the BSE Sensex rising sharply by 141.5 points on hopes that a war between India and Pakistan may not happen.

The mood in the market turned optimistic following the Prime Minister, Mr Atal Bihari Vajpayee, statement yesterday.

Securities prices also rallied by around 1-1.5 paise in a buoyant market. The rupee recovered to end at 48.9850/9950 from the previous close of 49.0550/0650 on dollar sales.

Gold moved to a new high with the 24-carat gold ending at Rs 5,315 per 10 gm (Rs 5,270) and 10-tola bar moved up to Rs 62,400, gaining Rs 400 overnight.

J M Mutual Fund, Chief Executive Officer, Mr Krishnamurthy Vijayan, said "The market had turned very negative on war news and with the war signals weakening, the market bounced back''.

There was buying across the board in most counters. Institutional buying - both domestic and foreign - was also seen on major counters, dealers said.

Opening sharply higher, the Sensex continued to move higher as the day progressed and at end closed at 3,255.62, up 141.57 points (up 4.55 per cent). On NSE, the S&P CNX Nifty gained 40.25 points (3.92 per cent) at 1067.

The rise in the stock price was on account of short-covering by some of the market players. "Short-sellers had become very active in the falling market and the covering of their position in today's trading led to a sharp rise in the stock prices,'' said Mr Anup Bagchi, Chief Operating Officer, ICICI Direct.com.

In addition, technical correction led to rise in the prices. "In the last 15-20 years, there has been a few occasions when the Sensex has fallen continuously for 7-8 sessions. So the rebound was likely to happen,'' said a technical analyst.

The mood in the market was bullish and this was seen from the advance of 1,176 shares compared to the decline of just 243 shares on the BSE. The turnover on both NSE and BSE was also higher than Thursday.

Among the gainers were - SAIL rising 19.82 per cent at Rs 6.65, Max India (15.96 per cent) and Nocil (15.82 per cent). Satyam Computers was also locked in the 10 per cent upper circuit.

Mr Vijayan said "next week the market should stabilise at around 3,300 levels after some profit-taking from today's trading."

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