Sensex fall halts, up 515 points

Highest ever single-day gain on buying support.

Stock market fortunes turned around for the day as the bourses beat three weeks of selling pressure to post the biggest-ever gain in the Sensex on Friday. The 30-stock benchmark index went up by 515 points as value buyers picked up stocks that now look attractively valued.

A last-hour smart recovery in US stocks and positive movements across Asian markets, which coincided with a slump in fuel prices, made conditions conducive for bulls.

As equities kept gaining ground consistently, the Sensex moved sharply up to a high of 9849.20 and ended the session at 9810.46, netting a gain of 514.65 points, its biggest ever (in absolute terms) on a single day.

The previous high was recorded on March 24, 1992 when the Sensex rose 426.05 points or 13.14 per cent to 3669.58.

On the National Stock Exchange, the 50-stock Nifty index, which touched an intra-day high of 2875.75, closed at 2866.30 with a gain of 141.95 points.

A sharp recovery on Asian bourses set the tone for the market's sparkling rally. The Nikkei average rose 0.81 per cent on Friday, a day after its worst fall in a year, as stronger-than-expected machinery orders data encouraged investors to buy machinery stocks.

The Hang Seng index rose 1.16 per cent while the Taiwan Weighted index rose 1.78 per cent. Crude oil prices moved downwards yesterday, with the Nymex light crude oil for July delivery slipping 47 cents to $70.35 a barrel, while the London Brent crude slipped 15 cents to $69.06 per barrel.

The Reserve Bank of India's decision to hike the repo and reverse repo rates by 25 basis points each after trading hours yesterday failed to dampen the sentiment.

Sandeep Shenoy, strategist, Pioneer Intermediaries said, "India cannot remain isolated from the plug pulled out by Japan on easy money supply. So, probably the short-term bottom in India is made, but the long-term bottom may be some time off. However, the interest in Indian stocks will remain and probably get rekindled once stability and order set in, which will take 3-4 months. Till that time, side-ways movement in the range of 9,800-10,200 is expected in the market."

Out of 2,466 stocks traded on the BSE, 1,596 advanced into the positive territory, 830 closed on a negative note, while 40 stocks finished unchanged from their previous closing levels.

The BSE recorded a total turnover of Rs 3483.34 crore and the turnover on the NSE stood at Rs 7101.41 crore in the cash segment and Rs 20,892.53 crore in the derivatives segment.

Foreign institutional investors have been net buyers to the tune of Rs 324.8 crore so far this month. Mutual funds, on the other hand, have been net sellers of equity worth Rs 1,109.67 crore.

In response to the 25-basis-point hike announced by the Reserve Bank of India in its benchmark reverse repo rate on Thursday, the government securities market tanked at the beginning of the trading session, but recovered towards the later part of the day.

While prices of government securities fell across maturities by 70-80 paise, the yield on the 10-year benchmark paper 7.59 per cent 2016 closed at a 5-year high of 7.82 per cent, as against 7.67 per cent on Thursday.

While the spot rupee strengthened on the back of foreign exchange inflows, in tune with the recovery of the equity market, the premia on the forward dollars shot up with rising cost of the rupee funds. The spot rupee opened at 45.96/97 and recovered to 45.89/90 before closing for the day at 45.99 to a dollar.

Six-month and one-year annualised premia on forward dollars closed higher at 0.98 per cent and 1.07 per cent, as against 0.80 per cent and 0.98 per cent, respectively, on Thursday.