Markets take U-turn, Sensex rallies by 221 points

The return of bulls was triggered by the jump in software and pharma stocks. The 50-share S&P CNX Nifty index of the National Stock Exchange also ended 5.03 per cent, or 63.85 points, higher at 1,333.85 points. It was Infosys which led the rally, and was the first to hit the upper circuit. Other stocks immediately followed. As a result, Sensex showed a rally of over 293 points from the low, and touched a peak of 4494.76 points.

Software scrips which suffered a setback in the past few sessions, attracted good demand from both FIIs and local financial institutions led by UTI following reports that the Nasdaq composite index on New York Stock market has hit an all-time high. The recovery was also due to technical considerations of the market in view of the sharp fall in share values in the past few sessions. Sensex had fallen by 890 points to 4270.74 from 5150 on October 11, 1999.

Foreign funds were reportedly net buyers in software scrips and select pharma shares like Novartis, Dr Reddy’s, Cipla, Ranbaxy and Dabur India. Local institutions also picked up shares of infotech scrips besides economy stocks like Tisco, Telco, Reliance, SBI, MTNL, BHEL and others. The smart rally was also due to short covering following end-account considerations on the NSE. Most of the pivotals hit the upward circuit by registering 8 per cent gains on sustained buying support from institutional investors. Ranbaxy, Satyam Computer, Infosys Technologies, Zee Tele, Global Tele and Reliance were at the forefront in today’s rally.

Marketmen said the UTI had reportedly pumped Rs 200 crore and the LIC Rs 100 crore into the market. “FIs were low profile in the last three weeks. Now they have realised the market had gone down to a very low level. Any further drop in share prices would not have been in the interest of the investors,” said BSE broker BV Shah.

FIIs, which sold stocks worth Rs 700 crore in October, also extended selective support to boost the bearish market. “The market witnessed a bearish phase for the last couple of sessions resulting in a 16 per cent loss in Sensex during October 11-31. It’s good that the trend has been reversed. We are bullish on the market due to three reasons. One, the outstandings have come down to respectable level. Second, FII selling has stopped and on the contrary are buying and third, a recovery of such magnitude from this low level is a very bullish sign,” said another operator.

In the specified group, 42 scrips including index heavy weights like Reliance, Infosys, NIIT and TISCO were locked in the upper circuit filter after exhausting the daily permissible limit. Only nine of the 150 traded specified scrips showed marginal losses. Zee Telefilm clocked the highest turnover of Rs 306 crore of the total volume of business of Rs 2647.79 crore that is sharply up from yesterday’s turnover of Rs 1856.37 crore. The market leader Zee Tele spurted by 236.55 to 4301. Ranbaxy Lab shot up by 64 to 864.40, Satyam Computer by 94.30 to 1273.30, RIL by 17.25 to 233.25, Silverline by 26.55 to 376.55, BHEL by 19 to 272, GACL by 42 to 593, HLL by 31.95 to 2334.95, ITC by 22.85 to 676, Infosys by 533.40 to 7201.40, NIIT by 164.75 to 2224.75, SBI by 15.05 to 243.25, TELCO by 5.55 to 226 and TISCO by 10.90 to 147.35.