Sensex rises 118 pts after losing 75 in early trades

The stock market lived out yet another volatile day but the sentiment turned positive towards the end with news of heavy foreign institutional investor (FII) purchases in key scrips.

The Bombay Stock Exchange (BSE) Sensex gained 1.98 per cent (117.91 points) to close at 6,064.10, after falling about 4 per cent over the previous two trading days.

Down almost 75 points in early trades, the Sensex recovered to reverse the downslide. Though the Sensex opened higher this morning, it slipped into negative territory immediately as selling continued amid concerns over the ban on investments through participatory notes.

Hectic foreign fund buying, coupled with short covering by local operators, helped the Sensex gain almost 118 points.

The broader National Stock Exchange (NSE) S&P CNX Nifty index gained 34.70 points to close at 1,935.35. But most of the action was confined to index scrips.

Despite the smart gains in the indices, the market breadth remained negative for the third straight day with declines outpacing advances 1050:752.

Said a dealer with a local brokerage: "The focus is on the quarterly performance of the corporate sector. And though most results have been encouraging, the market lost almost 250 points in the previous two trading sessions."

He added the correction was good because the market was overheated.

Players also indicated there was some scepticism on the FII inflows this year. FIIs have brought in Rs 1976.60 crore so far in 2004.

The State Bank of India scrip was up 3.80 per cent at Rs 659.60, ITC was up 1.66 per cent at Rs 1,140.35, Hindustan Lever was up 0.95 per cent at Rs 207.05 and Reliance Industries was up 0.88 per cent at Rs 585.85.

Tata Motors was up 4.42 per cent at Rs 509.45, Hero Honda Motor was up 4.95 per cent at Rs 486.30 and Bajaj Auto was up 1.79 per cent at Rs 1,057.50.

But Bharti Tele-Ventures was down 1.75 per cent at Rs 112.25 and TV Today, which debuted on Thursday, was down 4.49 per cent at Rs 173.20.