Amid sell-offs in most global and Asian markets, the Bombay Stock Exchange Sensitive Index, or Sensex, bucked the trend and recovered by over 550 points to close at its highest level in nearly six months. (The markets were closed on Tuesday due to Mahavir Jayanti).
Yesterday, the US market closed in the red as traders went on a selling spree before the results season. Both the Dow Jones industrial average and Nasdaq closed down by 186.29 points and 45.10 points, respectively.
The slide in the US market triggered a sell off in the Asian markets as well. All the Asian markets opened weak and almost all of them closed in the red. The Nikkei 225 closed down 2.77 per cent or 237.84 points. The Hang Seng, Shanghai Composite and Kospi were all down 3 per cent.
Taking global cues, the Sensex opened down by 350 points, but recovered in the afternoon session of trading and climbed 2 per cent to close at 10,742.34 points, it’s highest since October 15. The S&P CNX Nifty added 2.7 percent to close at 3,342.95 points.
The market breadth was strong on the BSE with 2,032 stocks advancing, as compared with 470 that declined.
Market experts said that the buying came mainly from foreign institutional investors (FIIs), who have been investing continuously since mid-March. On Wednesday, FIIs were net buyers of Rs 573.33 crore. Domestic institutional investors were net sellers of Rs 378.22 crore, according to provisional data from the BSE.
Also, market sources said that there was huge shorting in the morning by traders, who believed that Indian markets will follow global trends. These positions had to be aggressively reversed in the latter half of the day when buyers came in.
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Gul Tekchandani, investment consultant, said, “The valuations are quite attractive. In the B group, many shares are trading at 1-3 price earnings. This, coupled with positive sentiments, is driving the market.”
| STANDING TALL Amid selloff in other Asian markets, the Sensex continued its northward journey. It closed at its highest since October 15, 2008 | ||||
| Asia/Pacific | 7-Apr-09 | 8-Apr-09 | % Chg | Net Chg |
| Nifty | 3256.60* | 3,342.95 | 2.65 | 86.35 |
| Sensex | 10534.87* | 10,742.34 | 1.97 | 207.47 |
| Straits Times | 1,802.39 | 1,783.96 | -1.02 | -18.43 |
| Jakarta Composite | 1,490.86 | 1,465.75 | -1.68 | -25.11 |
| Taiwan Taiex | 5,576.85 | 5,443.56 | -2.39 | -133.29 |
| Nikkei 225 | 8,832.85 | 8,595.01 | -2.69 | -237.84 |
| Kospi | 1,300.10 | 1,262.07 | -2.93 | -38.03 |
| Hang Seng | 14,928.97 | 14,474.86 | -3.04 | -454.11 |
| Shanghai Composite | 2,439.18 | 2,347.39 | -3.76 | -91.80 |
| * As on April 06, 2009 | ||||
Besides the banking sector, which was flat at -0.22 per cent, all the other sectoral indices were in the positive. The realty, consumer durable and fast moving consumer goods indices were all up by 4 per cent, followed by public sector unit, oil and gas and healthcare indices that were up 3 per cent.
Among the Sensex stocks, Jaiprakash Associates climbed the most at 8.71 per cent. Heavyweight Reliance Industries rose 3.2 percent. Larsen & Toubro added 4.8 percent and Hindustan Unilever jumped 6.1 percent, the most in five months.