Market does 532 pts bungee jump

Sensex nosedives but ends in the green after Sebi stays ban on Indiabulls.

The Sensex witnessed an intra-day swing of 532 points""the second highest volatility ever ""before ending the day in the green.

The index had tumbled to an intra-day low of 11,345, down 490 points minutes after the opening bell, following the Securities and Exchange Board of India's decision to bar select brokerage houses from the market for their alleged involvement in the IPO scam.

The market, however, showed a spectacular recovery soon after Sebi stayed the ban on Indiabulls Securities from trading. The clarification that the ban on the brokerage houses was applicable only on proprietary trading and would not affect their clients also aided the rebound.

By the end of the trading session, the Sensex bounced back to close the day with a gain of 16.91 points to settle at 11,851.93. The S&P CNX Nifty rose 7.15 points to 3,515.25.

Market players said the initial panic was unwarranted. Sunil Shah, director, Khambatta Securities, said the order had nothing to do with the secondary market and thus should not have been the trigger.

Also, before the markets opened, everyone was aware that the ban on the brokerages was only on their proprietary accounts and not on transactions by their clients.

Vijay Narayanan, analyst, Almondz Research, said the market started off on a weak note as predicted by the players but LIC and PSU banks went on buying and held up the market. Also the local mutual funds cushioned the downfall. Even the sentiment in the F&O segment were bullish as the Nifty opened at a huge premium, he said.

Among the sectoral indices, the BSE consumer durables index witnessed the highest fall followed by BSE Metal. While the consumer durable index was down 1.18 per cent to close at 3,353.40, the metal index was down 0.68 per cent to end at 10,400.07.

Index heavyweight Reliance Industries (RIL) rose 1.13 per cent to Rs 1,007.80 on the back of good Q4 results. RIL has a huge weight of 10.56 per cent in the Sensex. ICICI Bank, which has 6.97 per cent weight in the Sensex, gained 1.84 per cent to end at Rs 577.05.

Two automobile stocks surged. Hero Honda rose 3.29 per cent to Rs 850 and car major Maruti Udyog gained 2.40 per cent to Rs 919.65. ACC rose 1.94 per cent to Rs 951.95. Firm cement prices have triggered a solid rise in the scrip over the past few days.

FMCG major Hindustan Lever (HLL) staged a solid intra-day rebound. It ended at Rs 290.65 after gaining 1.18 per cent.

Earlier, the stock had dropped as much as 4 per cent in early afternoon trade.

Software major TCS rose 1.55 per cent to Rs 1982.10. Media major Zee Telefilms jumped 7.12 per cent to Rs 264.20. Power generation major NTPC rose 4.87 per cent to Rs 135.75.

Though Indiabulls ended sharply lower at Rs 282.50, down 9.15 per cent, the stock staged a solid intra-day rebound after plunging 20 per cent initially. A staggering 6.3 million of its shares changed hands on the BSE.