Sensex shrugs off last week's losses, up 176

Heavy buying in afternoon trades pulled the Bombay Stock Exchange Sensex up to close just shy of 6,000 yesterday. With the 176.42 point gain, the Sensex, at 5,993.06, has recovered almost all the ground it lost last week.

Between Friday and Tuesday, the Sensex has gained over 400 points (7 per cent) against a 470-point loss between Monday and Thursday.

During the day the index scaled a high of 6,005.54. The Nifty also gained over 57 points to end at 1,904.70.

Dealers attributed the positive undertone to the market regulator's clarification on participatory notes, which was hanging heavy on the market for the whole of last week. But what started the surge was the short covering in derivatives ahead of the settlement due on Thursday.

Mihir Kothari, equities dealer at Motilal Oswal Securities, said: "There was genuine buying across the board with retail as well as foreign institutional investors active in most front-line stocks. It was more of a technical bounce back after the carnage last week when the Sensex had lost over 8 per cent in just three trading sessions."

According to a technical analyst, the Sensex could witness a further upside of 100-odd points as it has managed to close above the crucial resistance of 5,991. The next support level for the Sensex was at 6,089, he added.

However, today's gain was on the back of thin trading, lower at 152 million shares compared with the average daily volume of 200 million. Gainers outpaced losers 2:1.

The Securities and Exchange Board of India (Sebi) had clarified its stand on participatory notes after market hours on Friday. It said that the notes could be issued only to entities regulated in their home countries.

There was apprehension in the market that hedge funds might be banned from participating in the Indian market through offshore derivative instruments.

Leading the index surge today was Tata Motors, which gained 9.2 per cent to Rs 510.45. Reliance Industries spurted 4 per cent to Rs 581.55 in expectations of better quarterly results, while the State Bank of India scrip rallied 4 per cent to Rs 649.20.

The Bharti Tele-Ventures scrip closed 16.49 per cent higher at Rs 147.65, after the company announced that it planned to raise $600 million debt offshore.