The Hindu Business Line : Markets bounce back in style

Funds returned to make purchases helping the BSE Sensex gain 51.53 points to close at 11,873.73. The Sensex swung 575.55 points during the day, with the benchmark index touching an intra-day low of 11,378.96.

Recovery began at noon courtesy fund buying and short covering.

On the NSE, the S&P CNX Nifty ended 20.35 points higher at 3,523.30.

Gujarat Ambuja lead the rebound, gaining 7.58 per cent to close at Rs 108.55 on the BSE.

Shares of cement companies gained following assurances by industry that it would reduce prices by five per cent for supplies to the Government.

ACC ended with a 4.84 per cent gain at Rs 903.55 on the BSE.

"Short covering and fund buying at lower levels were the main factors that helped markets gain," said Mr Kunj Bansal, Chief Investment Officer, Religare.

The high amount of selling of client positions by broking firms due to lower or no margins concluded by mid-session.

"This helped in bringing down the selling pressure," said Mr Pankaj Namdharani of SPA Securities.

The rupee slipped to a six-month low of 45.65 against the US dollar in early trade but erased its losses to end slightly up.

It opened at 45.55 but slipped to 45.65 on account of sustained weakness at the stock markets.

The rupee ended around 45.51 against the previous close of 45.55. Dealers said that its movement would be determined by the inflation data due from the US over the next two days.

Foreign funds, net sellers for over Rs 720 crore on Monday, continued as sellers on Tuesday as well.

According to provisional figures from the NSE, FIIs were net sellers for Rs 574.4 crore today.

Dealers said that domestic mutual funds have entered the market in a big way during the last two days. On Monday, mutual funds were net buyers for Rs 794.25 crore, taking their total net investment for the month to Rs 2,292 crore.

Overall, the bourses' undertone was weak as evident in other indices. Most indices on the BSE and the NSE ended in the red. The market's breadth was also negative, with 1,832 stocks declining against 670 advancing on the BSE.

Most other Asian stock markets ended weak tracking overnight falls in commodity prices.

However, metal prices bounced back in early trade on global markets as hedge funds returned to buy in a weak market.

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