Sensex claws back 372 pts

Records its fourth highest gain in history.

Harshad Mehta still tops the record books for two of the biggest single-day Sensex gains, 574 points on March 2, 1992, and 426 points some 22 days later. Chidambaram's dream budget sparked a 396-point jig on March 3, 1997.

But May 18 has now claimed a place in the sun. On a day when most eyes were on Sonia Gandhi, the Sensex vaulted into the record books by recording its fourth highest gain in history, a rise of 372 points that enabled investors to recoup Rs 72,000 crore of wealth losses incurred over the past few days. The Sensex closed at 4,877.02, up 8.25 per cent. The rupee closed a wee bit higher and bond yields eased.

Unlike yesterday, when losers outnumbered gainers 10:1, today it was 2:1 in favour of the bulls. Some 1,158 shares advanced compared to 449 declines. As news about Sonia Gandhi's move to opt out of the prime ministerial sweepstakes trickled in, bargain buying pushed the markets up, additionally driven by hopes of seeing Manmohan Singh, the original architect of reforms, at South Block. At close, the overall market capitalisation crossed the Rs 1 lakh crore mark once again, closing at Rs 10,22,840 crore today. The market capitalisation of Sensex stocks gained Rs 39,684 crore from Rs 4,98,478 crore to Rs 5,38,162 crore, with 29 of the 30 stocks gaining, exactly the reverse of what happened yesterday.

Will the party last? No one is willing to bet on it, thanks to the heart-stopping yo-yoing of the Sensex. But Manish Bhatt of Prabhudas Lilladher says that any decisive upward movement will depend on the political signals coming from Delhi. "Investors will wait to see what shape the common minimum programme takes before making further commitments," he said.

Today's big gains were probably in the nature of a correction brought on by value buying. Market participants said that funds and institutions bought a lot of shares. The numbers from yesterday tend to support this view, with FIIs being net sellers to the tune of Rs 63.50 crore and mutual funds buying Rs 341.60 crore.

The biggest gainer in the Sensex basket was HDFC Bank, up 24.47 per cent to Rs 356.30, followed by Wipro, up 22.33 per cent to Rs 1,543.60, and Reliance Energy, up 20.40 per cent to Rs 574.95. The HDFC Bank scrip was the second-most hammered Sensex stock on Monday, falling almost 21 per cent, proving once again that the market is a creature of moods.

Gains were across-the-board, with the BSE banks index, the Bankex, being the largest gainer today, up 12.13 per cent, followed by the IT sector index, up 11.34 per cent. The BSE TECk index was up 9.19 per cent, the FMCG index 7.61 per cent and the PSU index 6.65 per cent.

The National Stock Exchange (NSE) Nifty gained 115.20 points, its largest gain ever, to close at 1,503.95. Buying power was visible as traded volumes shot up; the cash market turnover was at Rs 2,479.25 crore on the BSE and Rs 5,271.45 crore on the NSE.

Heavyweight ITC was up 10.82 per cent to Rs 917.55, while State Bank of India gained 9.81 per cent at Rs 490.85, Hindustan Lever 8.40 per cent at Rs 130.35 and Reliance Industries 7.45 per cent at Rs 433.65.

The markets were helped higher today by gains in other, larger Asian markets, with investors turning to sectors that are less vulnerable to policy flip-flops""software and pharma among them. Tech bellwether Infosys Technologies was up 7.95 per cent to Rs 4,886.75 and Satyam Computer 5.08 per cent to Rs 308.

Dr Reddy's Labs gained 12.70 per cent to Rs 887.65, Cipla was up 10.35 per cent to Rs 238.80 and Ranbaxy Labs was up 3.97 per cent to Rs 1,008.15.

Among the other star performers were Tata Power (up 10.15 per cent to Rs 288.10) and Tata Steel (up 11.83 per cent to Rs 293.60). MTNL was up 13.51 per cent to Rs 120.95 and Bhel 9.89 per cent to Rs 437.70.

Other PSU shares were less buoyant. ONGC gained a paltry 1.51 per cent to Rs 639.25, Hindustan Petroleum was up 1.29 per cent to Rs 318.85 while Bharat Petroleum fell 4.94 per cent to Rs 322.15, weighed down by record-high global crude oil prices of nearly $42 per barrel.

A part of yesterday's fall came amid rumours of a payment crisis in the market but the Securities and Exchange Board of India (Sebi) said the Indian financial markets were safe for investing and there was no payment crisis. The market regulator held a meeting to review settlement and risk management issues and found nothing amiss.