Stock markets rebound after three-day losing streak

Mumbai, May 23 | Updated: May 24 2006, 06:17am hrs
A large amount of value buying brought the three-day losing streak of the benchmark indices to a halt on Tuesday. However, volatility was still the word of the day with the 30-share Sensex trading in a range of 674 points, before closing at 10,822.78, up 341.01 points. The broader S&P CNX Nifty of the National Stock Exchange (NSE) settled at 3,199.35, up 118 points.

The indices witnessed alternate bouts of buying and selling pressures. The Sensex opened with a positive gap of over 100 points, before moving southwards and shedding nearly 300 points when compared to Mondays close.

Buying in sectors like power, metal and oil, however, pulled up the indices with both Sensex and Nifty gaining more than 3% each.

Interestingly, Tuesdays gains have been on the back of lower volume and a higher amount of selling by the foreign investors. The turnover on BSE and NSE was lower at Rs 3,819.73 crore and Rs 8,013.32 crore, respectively. According to provisional figures, FIIs were net sellers at Rs 1,132.03 crore in the cash segment on Tuesday.

Arun Kejriwal, director, KRIS, said, The drop in volume and higher selling by FIIs, compared to that of the previous day is a cause for concern. The markets have to consolidate if the recovery has to be long lasting. Dealers said some amount of leveraging activity was also witnessed in the first hour of the trading session and that pulled down the indices. After the initial session, it was all value buying, they added.

All BSE sectoral indices, benchmark index close in the black
Initial jitters on back of leveraged position followed by value buying throughout the session
Sensex posts highly positive market breadth
The BSE Metal index was the best performer, gaining more than 7% or 595 points. The rest of the sectoral indices registered gains in the range of 2-5% each.

Among the Sensex pack, 27 stocks moved northwards with Grasim Industries leading the pack, gaining more than 9% or Rs 159.65 to close at Rs 1,916.70. Tata Power, Tata Steel and Wipro all gained more than 7% each. Bhel, Reliance Energy, ONGC, RIL, Infosys Technologies, ICICI Bank, TCS and Satyam Computers, were the other gainers.

Indian shares, which have had a strong run-up this year, are down nearly 15% from an all-time high set on May 11.