Sensex bounces back, up 111 pts

Bargain buying and short covering on the last day of the financial year helped the benchmark Bombay Stock Exchange (BSE) Sensex to close strongly in positive territory on Thursday, in line with other major world markets.

Investors bought scrips of consumer durables, technology and fast-moving consumer goods companies and of public sector enterprises, which were among the biggest gainers on Thursday.

Opening in positive territory, the BSE Sensex hit a high of 6,509.02 in intra-day trades before closing at 6,492.82, up 1.75 per cent (111.42 points) from yesterday's close.

In the BSE Sensex basket 25 of the 30 scrips closed with gains. The breadth of the market was positive, with gainers outpacing losers 6:1. A smooth rollover of monthly derivatives contracts added to the positive sentiment, brokers said.

Naresh Kothari, head of institutional broking at Edelweiss Securities said, "There was some bargain buying and short covering on Thursday. Investors turned fresh buyers in recently battered scrips with some major buying seen in mid-caps."

Brokers added that investors bought technology and other blue chips on hopes of robust quarterly earnings from these companies next month. Technology companies were among the first lot to declare financial results, analysts added.

Narayan S A, managing director at Kotak Securities, said: "The market is expected to be range bound and volatile. Foreign institutional investor (FII) inflows have been the driver so far and will continue to do so."

Volumes were higher than yesterday in the cash segment of the bourses; the BSE reported a turnover of Rs 2,201.69 crore and the NSE reported a turnover of Rs 5,753.86 crore.

There was also short covering in the F&O segment, brokers said. There was talk in the market earlier in the day that fund managers were expected to pick up battered blue chips to boost their net asset values ahead of the end of the financial year, market sources said.

The Wipro scrip was the biggest gainer in the Sensex basket, rising 6.49 per cent to close at Rs 671.10, followed by the ITC scrip which gained 4.92 per cent to Rs 1,343.75. Bajaj Auto gained 4.60 per cent to Rs 1,081.35, Infosys Technologies gained 3.84 per cent to Rs 2,252.55 and the Satyam Computer scrip rose 3.01 per cent to Rs 408.50.

The Ranbaxy Labs scrip was the biggest loser in the Sensex basket, falling 1.98 per cent to Rs 1,003.85, the Reliance Energy stock was down 1.82 per cent to Rs 529.95, the HDFC scrip fell 1.16 per cent to Rs 726.60, Dr Reddy's Labs scrip fell 0.89 per cent to Rs 739.10 and the State Bank of India scrip was down 0.61 per cent to Rs 656.95.

FIIs were net buyers to the tune of Rs 9.40 crore on Wednesday while mutual funds were net buyers to the tune of Rs 94.97 crore according to figures on the Securities and Exchange Board of India (Sebi) website.

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Bulls in the ring

The Sensex hit a high of 6,509.02 in intra-day trades before closing at 6,492.82, up 1.75% from yesterday's close

The breadth of the market was positive, with gainers outpacing losers 6:1