Sensex bounces back, up 344 pts

Index ends at 12,217.81; metals, auto makers, banks lead bull charge.

The BSE Sensex zoomed 344 points on Wednesday, taking strong cues from other markets and the reversal of prices in the commodity markets.

The bull charge was led by metal companies, automobile makers and banks. Closing at 12,217.81 points, the Sensex gained nearly 3 per cent and recouped almost half of the losses incurred during the correction that lasted for three days. The NSE Nifty rose 112 points to close at 3,635.10.

The markets opened strongly in line with their other Asian counterparts, which also witnessed a slump on Monday and Tuesday led by a meltdown in the metal stocks. Buying intensified as the session progressed.

Owing to the all-round buying, the market breadth remained extremely positive throughout the session on Wednesday. Out of 2,614 stocks that were traded on the BSE on Wednesday, 2,111 advanced, 470 declined and 33 remained unchanged.

The strong support from local mutual funds in the past few days helped the markets to sustain the losses. The domestic funds stepped up buying even when the market was under correction.

Mutual funds bought shares worth a net Rs 334 crore on Tuesday and Rs 794 crore on Monday when the market had plunged 463 points.

But market experts are advising caution in the short-term.

Rahul Rege, senior vice-president, Sharekhan, said, "Heavy buying by domestic mutual funds helped the market to continue with yesterday's upward trend. There may not be a huge rally ahead of the F&O expiry. The investors should not be over-aggressive in the short-run as the market will be driven by the covering of F&O positions."

An institutional dealer said, "Though the recovery of Asian markets and commodities helped the sentiment on Wednesday, there is some nervousness because of the big swings and selling by foreign funds."

Among the sectoral indices, the BSE metal index scored a 5 per cent gain on Wednesday, while the BSE oil and gas index surged 4.35 per cent.

The consumer durables, auto, PSU, bankex and FMCG indices gained 3.18-3.5 per cent over their previous closing levels. The capital goods index climbed up 2.96 per cent, while the information technology and teck indices shot up by 2.13 per cent and 2.39 per cent, respectively.

The mid-cap index scored a gain of 3.36 per cent and the small-cap index did even better by moving up 3.83 per cent.

State Bank of India, the biggest gainer, ended the day with 7.24 per cent to Rs 990.35. Tata Steel surged 6.8 per cent to Rs 612.25. ONGC went up 5.83 per cent to Rs 79.4. ITC surged 5.35 per cent to Rs 204.85. Hero Honda gained 5.31 per cent to Rs 894. Bajaj Auto, too, was not far behind and rose 4.65 per cent to Rs 3,267.70. Reliance Industries rose 4.2 per cent to Rs 1,087.10.

Among IT majors, Satyam Computers rose 2.98 per cent to Rs 768.15. Infosys Technologies finished with a gain of 2.17 per cent at Rs 3,211.75, Tata Consultancy Services rose 1.86 per cent to Rs 2,015.70, while Wipro gained 1.72 per cent to close at Rs 543.75.

Among the Sensex components, only Cipla (down 1.6 per cent to Rs 258.65), Grasim Industries (down 0.5 per cent to Rs 2171.20) and NTPC (down 0.38 per cent to Rs 130.60) failed to gain on Wednesday.