Markets light up, Sensex gains 207

Samvat 2061 ends in style.

The markets embraced the spirit of Diwali with a strong rebound on the last day of Samvat 2061.

Shrugging off the weakness witnessed in the past three sessions and the bomb blasts in Delhi on Saturday, indices surged on the back of renewed buying interest at lower levels, facilitated by the recent fall in stock prices. Dealers termed today's gains as a technical bounce-back, as volumes were low.

The recovery followed a resurgence in global markets. Strong US GDP data, which indicated 3.8 per cent US economic growth in the third quarter, was better than analysts' expectations, leading to gains in US markets on Friday. The improved sentiment found its echo in many other Asian markets as well, none more so than in India.

The 30-share BSE Sensex jumped 206.68 points to close the day at 7892.32, recording its biggest rise since September 26, when the index went up by 256 points. The S&P CNX Nifty rose 54.90 points to settle at 2370.95.

Compared with the 2.60 per cent rise in the Sensex, gains in other Asian indices were lower. While Tokyo's benchmark Nikkei closed nearly two per cent higher, Taiwanese markets ended 2.3 per cent up. South Korea's KOSPI index ended 1.5 per cent higher.

Today's rebound came as a breather after the Sensex tanked more than 1,114.32 points in the period between October 4 (when it posted its all-time closing high of 8799.96) and October 28. But today's relief rally came on the back of low volumes. The Bombay Stock Exchange clocked a turnover of Rs 2114.78 crore, much lower than Friday's Rs 2,572 crore.

Punjab National Bank, Steel Authority of India and Maruti Udyog were the top gainers among the Nifty stocks, while BPCL and HPCL were the big losers.

Despite today's rise, market players are advising caution. 'This is a pull- back rally which may last for a day or two. However, the market should seek lower levels and the Sensex should find its support at around 7500-7525 levels,' said Ambareesh Baliga, vice-president, Karvy Stock Broking.

Among the indices, the BSE consumer durables index gained the maximum and was up 12.40 per cent to 2347.63 followed by the BSE bankex, which was up 2.79 per cent to 4425.36. Advances outpaced declines at the BSE. For every share that fell during the day, nearly two gained. Overall, 1468 BSE stocks advanced and 883 declined. Sixty scrips remained unchanged.

Markets are keenly awaiting the outcome of tomorrow's US Federal Reserve meeting. Whether US interest rates will be further hiked or not will be decided at this meeting.

Markets are expecting a 25-basis point rise in US rates. Rising US rates have been touted as one of the major reasons for FIIs pulling out money from Indian and other emerging markets. FIIs have sold shares worth around Rs 3,500 crore in October alone.

Dealers said technology stocks focusing on exports were a good hedge against a weakening rupee and rising interest rates. Tata Consultancy Services gained 2.8 per cent to Rs 1,400.25 while Infosys firmed 4.4 per cent to Rs 2,523.90. Wipro added 2.3 per cent to Rs 364.70 and Satyam Computer surged 6 per cent to Rs 606.15.

Transactions will take place for a little over an hour tomorrow for Muhurat trading, marking the beginning of Samvat 2062. The market will remain closed on Thursday and Friday.