Sensex back above 8,000

Index snaps out of 3-day fall, climbs 134 points.

After a three-day losing spree, the BSE Sensex gained 133.83 points today, closing the week above the 8,000-point mark at 8068.95. The broader S&P Nifty advanced 48.30 points to settle at 2443.75. Encouraging government policy initiatives and short covering led to the smart recovery.

The rupee, too, climbed out of a four-day fall to finish at 45.07 to a dollar against Thursday's close of 45.23 after hitting an intra-day high of 44.98.

The bullishness in the spot rupee followed statements of the finance minister on the strength of the rupee and his confidence in the Indian economy being able to attract strong foreign institutional investments.

According to foreign exchange dealers, once the rupee gained, exporters started selling dollars during the day.

Market sentiments were boosted by the government's reforms-friendly announcements""raising the foreign direct investment ceiling in the telecom sector to 74 per cent from the current 49 per cent and allowing foreign portfolio investments in television news channels within the existing 26 per cent limit on overall foreign holdings.

Besides, the finance minister's statement that the government was committed to maintaining a moderate tax regime, which would propel growth, also added to the sentiment.

Despite today's gains, analysts noted that worries about foreign institutional inflows would continue. Big selling by FIIs have been the main reason for the market slide in the recent past. The net sales by the FIIs yesterday were worth Rs 196.70 crore. So far in October, they have sold shares worth a net Rs 1623.90 crore.

'Going forward, the markets are likely to witness range-bound activity,' said Suresh Parmar, senior equity dealer at Darashaw Broking.

Tata Power, GAIL and Bharti Tele-Ventures were the leading gainers today among the Nifty stocks with all recording gains above 4 per cent. A 38- per cent drop in the September quarter net profit saw the Zee Telefilms stock shedding 7 per cent, which made it the biggest loser in the Nifty 50.

In sectoral action, auto shares gained as crude oil prices dropped to below $60 a barrel. Oil and gas and metal stocks also witnessed gains while bank shares lost ground. FMCG and information technology counters also saw buying interest.

Despite the gains, key indices still ended up in the red for the week. While the Sensex lost 132.78 points during the week, the Nifty shed 40.65 points. Volatility marked Friday's trading with the Sensex moving in a 179.63-point range during the day.

The markets opened on a firm note but the bulls soon found the going tough. However, a late surge due to fresh buying at lower levels saw the indices moving back into positive territory.