Stock markets staged an extraordinary recovery towards the end of the day, buoyed by Finance Minister Pranab Mukherjee’s comment about possible lower rates in the new tax code and on Home Minister P Chidambaram’s remark that profitable state-owned companies should list at least 10 per cent shares on exchanges.
After a surge of 523 points yesterday, the Bombay Stock Exchange Sensitive Index, or Sensex, opened on a weak note at 15,926 due to subdued vibes from global markets. Index heavyweight Reliance Industries was trading in the red following the news that one of the judges had recused himself from the Supreme Court hearing on the companies gas dispute with RNRL.
The index touched a low of 15,565 and continued to languish in the red for the major part of the day.
However, pep-talk by Mukherjee and Chidambaram led to frenzied buying in late-noon sessions and the index recouped its losses and rebounded into the positive zone to touch a high of 16,092.38, up 527 points from the day’s low.
The index managed to regain the psychological 16,000 level and closed at 16,063.90, up 151.77 points (0.95 per cent). The CNX Nifty ended at 4,765.55, up 54.75 points, or 1.16 per cent.
DD Sharma, vice-president, research, Retail Anand Rathi Financial Services, said some short-covering and Chidambaram’s talk on disinvestment led to the sharp recovery. Sharma said if the Nifty managed to break the 4,850 level, it would be perceived that the sluggishness in the market was over.
Among BSE-30 stocks, Reliance Infrastructure led the gainers and was up 5.6 per cent. The other major movers were Reliance Communications (5.3 per cent), Hindalco (5 per cent), Bharti Airtel (4.5 per cent), Mahindra & Mahindra (3.56 per cent) and Tata Steel (3.3 per cent).
More From This Section
IFCI closed around 14 per cent higher at Rs 49.95 on news that the government was to appoint a consultant to decide its future. Reliance Industries, which was dragging in the morning session, recovered 5.1 per cent from the day’s low of Rs 1,851. The scrip closed at Rs 1,940, up 1 per cent from the previous day’s close.
State Bank of India was the only major loser towards the end. It was down 1.1 per cent. The market breadth was positive. Out of 2,745 shares traded, 1,827 advanced, 841 declined and 77 were unchanged on the BSE. Sectors like metals (2.93 per cent) and realty (2.58 per cent) led the upward move. The other major sectoral movers were power (2.56 per cent), auto (1.93 per cent) and oil & gas (1.68 per cent).
The Asian markets were in the red on concerns over global economic recovery. The Hang Seng slipped 0.63 per cent and the Nikkei dropped 1.29 per cent.