Sensex bounces back, up 65 points

Repeating a by now familiar pattern, the stock markets paused for breath after a 220-point dive yesterday, with most of the indices ending half a per cent up after highly volatile trade this morning.

Opening 25 points above yesterday's close, the Sensex soon went into free fall after news of foreign investors making even bigger sales than yesterday reached the market. But the bourses bounced back to make moderate gains after nearly an hour of trading.

While the Sensex closed with a 64.69 point (0.62 per cent) gain at 10,573.54, the 50 stock Nifty index gained 0.4 per cent (12.40 points) as it ended at 3,129.10.

Within one hour of the start of trading today, The Sensex had plunged nearly 150 points to 10,385 and the Nifty to 3,069.85, evoking fears of a "major correction" and "FII pullout".

Led by cement and infotech stocks, the market, however, made a gradual recovery with the Sensex going all the way up to 10,590 just before close.

"People soon realised that the sell-off in the derivatives markets was more of profit booking by FIIs than the prelude to a large-scale pull-out from the spot market," an analyst pointed out.

"It is virtually impossible for FIIs to carry out such a fast pullout without destroying the value of their own investments in the process," he added.

Automobile and pharmaceutical stocks did badly today while cement, metals, banking and IT led the charge.

Among the sectoral indices, the BSE IT index showed the maximum gains at 1.09 per cent while the biggest drop was registered by the Auto index with a change of 0.8 per cent.

Only the consumer durables and health care indices, beside the auto index, ended in the red today. Banking index too was up by a little more than one per cent while metals were up by 0.8 per cent.

The gainers on Nifty were led by cement stocks Gujarat Ambuja which went up 6.52 per cent to Rs 98, ACC (Rs 749.70, up 4.98 per cent) and Grasim (Rs 1891, up 4.41 per cent.) Capital goods major ABB too kept up the pace with a 3.59 per cent gain to Rs 2950.7 0 and Nalco (Rs 285.2, up 2.4 per cent,) Dr Reddy's (Rs 1332.55, up 2.2 per cent.) IT majors Infosys, Satyam and Wipro held their own with gains between 1.5 to 0.8 per cent.