Sensex Bounces Back, Gains 142 Points

Mumbai, May 24: | Updated: May 25 2002, 05:30am hrs
The softening of stance by Prime Minister AB Vajpayee on the issue of an armed conflict with Pakistan threw a shield of comfort on the market on Friday. The benchmark 30-share BSE Sensex rose a hefty 142 points or 4.55 per cent, bouncing back sharply from a six-month low hit on Thursday.

Dealers said, “The rally on Friday was triggered following the Indian PM’s comment at a news conference on Thursday that he saw no war clouds.”

The comments by the Indian PM proved to be an even greater soothing factor for the Pakistan stock market than it was in India. The Karachi Stock Exchange (KSE) on Friday leaped 8.8 per cent or 135.64 points to close at 1,663.21 points — single largest gain in a day in over a decade.

On the Stock Exchange, Mumbai (BSE), the Sensex gained 141.57 points to close at 3,255.62 points after opening at 3,153.03 points. The positive mood in the market was visible ever since trading commenced on Friday. Sensex opened on a firm note, which was also the day’s low, thereafter the movement was only northwards. The Sensex hit a high of 3,261.90 in late trades on Friday.

On the NSE, the S&P CNX Nifty closed up 40.25 points — or 3.92 per cent — to close at 1,067 points. In the last eight trading sessions up to Thursday, Sensex lost 328 points or 9.5 per cent. The fall in the last eight trading sessions had erased around Rs 30,000 crore by way of market capitalisation.

Dealers said, the buying was witnessed across the board on Friday, with gains led by Sensex heavyweights like Reliance Industries, Hindustan Lever Ltd, ITC Ltd and Reliance Petroleum.

Hitesh Sheth, technical analyst at Prabhudas Lilladher Securities said, “The market is purely driven on day-to-day news. The positive news of the Prime Minister’s statement propelled the pullback rally on Friday. The sharp loss on Thursday was triggered following the comments by the Prime Minister on Wednesday that it will be a ‘decisive battle’.”

Said Mr Sheth, “Whether the sharp gain on Friday can be called a rally or just a correction can only be understood after witnessing the movement in the markets over the next couple of days.”

“Technically the resistance for the Sensex is at 3,300 level points, “Mr Sheth added.

Another technical analyst said, “A similar slump of around 250 points to 300 points was seen in the market in the month of December following the terrorist attack in the precincts of Parliament.” He said, following the easing of tensions in December after the terrorist attack, the market had recouped sharply.

Said Mr Sheth, “If the war fears recede completely, we expect the market to come back to the levels witnessed in the beginning of last week — around the 3,400 point mark.”

However, dealers said caution will prevail in the market, which will still remain very sensitive to developments on the border front.

Among the prominent gainers among the Sensex heavyweights on Friday were Infosys, which closed at Rs 3,774.6, gaining Rs 121.50 on BSE, ITC was up Rs 30.25 at Rs 613.80, Hindustan Lever up Rs 10.55 at Rs 199.50, Reliance Industries up Rs 17.85 at Rs 271.60 and Reliance Petroleum up Rs 1.30 at Rs 23.95.

Among the frontline software stocks, Satyam closed up Rs 21 at Rs 231.25, HCL Technologies up Rs 13.30 at Rs 232.50 and Wipro up Rs 30.70 at Rs 231.25.

Indian Oil Corporation (IOC) gained Rs 15.05 to close at Rs 205.55. The gains in IOC were also fuelled by reports that the company has decided to sell its shares in Oil and Natural Gas Corporation (ONGC) and Gas Authority of India Ltd (Gail).