Domestic funds go buying, Sensex up 355 pts

Massive buying by large domestic mutual funds propelled prices of key benchmark stocks in the final hour of the trading session on Friday.

According to provisional figures on the Bombay Stock Exchange (BSE) website, domestic institutional investors were net buyers to the tune of Rs 729.50 crore.

The Sensex, the BSE's benchmark 30-share index, rose by 2.22 percent, or 355 points, to close at 16,371. The S&P CNX Nifty, the broader index of the National Stock Exchange (NSE), was up by 2.31 per cent, or 112 points, to end the day at 4,942.

"Mutual funds were waiting for the markets to stabilise or show some upward movement as they could neither buy daily nor see their NAVs taking a serious hit as stocks plunged by over 5 per cent on a daily basis," said Ambrish Baliga, vice-president, Karvy Stock Broking.

Baliga is of the view that this is a phase of consolidation and mutual funds as well as foreign institutions are freely buying into some of the fundamentally strong mid and small-cap stocks. "Even though the rally may not be too robust but consolidation will remain strong," he said.

Foreign institutional investors, however, were net sellers of Rs 401 crore in the cash market on Friday.