Bourses bounce back, Sensex soars 344 pts

Mumbai, May 17 | Updated: May 18 2006, 05:30am hrs
Exactly two years after May 17, 2004, when the Sensex tanked 565 points, the equity bourses chose to mark the day on Wednesday with a massive 344 point surge. The benchmark indices wiped out 90% of the losses suffered on Monday between Tuesdays and Wednesdays trading.

The first day of this week had seen the Sensex shed 463 points. The 30-share Sensex of BSE jumped 344.08, or 2.9% to 12,217.81, its biggest single day gain since May 18, 2004. The S&P CNX Nifty of the National Stock Exchange (NSE) gained 111.80, or 3.2% to 3635.10. The Sensex lost 463 points in a single session on May 15, following the meltdown in metal prices in the international market.

Rahul Rege, senior VP, ShareKhan said, The last two days have seen a lot of unwinding of positions. One can take long positions, say, for another 100 points, but it is advisable not to go overboard. Caution is the keyword.

Tata Steel and Hindalco, both Sensex heavy-weights, rose after copper, aluminum and zinc prices rebounded from a two-day decline and also after non-ferrous metal producers in the domestic market announced sizeable price hikes. The BSE Metal Index, comprising 15 top metal producers gained 5%, which was battered down 11% on May 15.

The price hike announced by the domestic metal producers has helped reverse the price trend in metal stocks, a metal analyst with a domestic brokerage said.

Across-the-board buying was visible from the highly positive market breadth with 2,111 (81%) stocks advancing against 470 (18%) declining and 33 (1%) remaining unchanged.

Foreign institutional investors (FIIs) continued to remain net sellers. However, their selling has slowed down. They were net sellers at Rs 533.40 crore on Tuesday as against Mondays net sales of Rs 728.40 crore in the cash segment.