After body blow, FII buying lifts Sensex up 8 points

Our Markets Bureau

Mumbai, May 15: AFTER the body blow given by the markets regulator in the form of a ban on the badla system of trading on Monday, the sentiments on the stock markets rebounced on Tuesday primarily on buying by the foreign institutional investors.

The jump in the tech stocks aided the climb up from the pit that the Sensex found after the Sebi move. Sentiments at the opening session were too bearish that saw the benchmark of both the premier bourses, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), sharply lower by around 90 points from yesterday’s close. However, during the day’s trading, it gained momentum backed by the FII and institutional buying that finally saw the indices up, though marginally.

The Sensex and S&P CNX Nifty recovered by 157 and 49 points respectively from their intra-day low levels.
The market participants have welcomed the Sebi move to do away with the circuit filters and that was one of the reasons for the speedier recovery in the market after it opened weak, said a dealer.

The opinion expressed by a section of the marketmen about the recovery from the lower level was that the Sebi decision could have been misunderstood by the participants. The Sebi decision clearly states that all the positions created on or after May 15 will have to be squared off by July 2, and instead, the players would have misunderstood that the positions created from May 16 will have to be squared up by July 2 and all the positions taken on May 15 will get time up to September 2, to offload.

This misinterpretation could have played a major role in the recovery of the market besides heavy buying orders from the FIIs.

The Sensex opened sharply lower by about 90 points at 3480.42 as compared to Monday’s close of 3568.93 and slipped another 60 points downwards at 3420.14 which happened to be the day’s lowest level but started picking up soon before the mid-session and touched the day’s high of 3579.35 before closing at 3576.96 netting a gain of 8.03 points.

Nifty followed the suit and recovered 49.05 points and closed with a minor gain of 4.50 points at Rs 1145.30. u
Trading volumes at BSE perked up sharply on Tuesday and the exchange registered a turnover of Rs 1351.16 crore as compared to Monday’s turnover of Rs 1015.54 crore. With the only exception of Reliance Industries Limited (RIL), all the top active stocks in the list were from the new economy sector.

Carrier Aircon was once again in the limelight on back of continuous buying from all quarters and the stock was locked further in the 16 per cent upper circuit at Rs 85.55, nearing its open offer price of Rs 100. Sterlite Optical counter also remained volatile with the stock rising 16 per cent intra-day after losing 8 per cent first at Rs 356.50 and then closing at Rs 418.40.

Thomas cook, Saw Pipes, ICICI Bank and TVS Suzuki also remained in the limelight with all these counters registering a gain of more than 8 per cent.

Satyam Computers continued to remain the most active stock value-wise at Rs 198.92 crore with 89.22 lakh shares changing hands ahead of its ADS listing. RIL came second with the counter clocking a turnover of Rs 138.75 crore and 38.08 lakh shares traded on the BSE. The other most active counters included Infosys Technologies, Wipro, Global Telesystems and Zee Telefilms.