Bulls back, push Sensex up 123 points

Sensex had lost over 5 per cent last week after hitting a record high of 4965.79 last Monday. “It is a technical correction after recent falls,” analysts said. Sensex started higher at 4728.19 and gradually moved upwards to the day’s high of 4839.16 before closing at 4832.56 with a sizeable gain of 122.63 points or 2.60 per cent compared to the previous closing of 4709.93. On the National Stock Exchange (NSE), the S&P CNX Nifty Index gained only 15.25 points to 1390.20.

But the tightening of exposure limits and an increase in carry-forward margins by the BSE from the current settlement could still affect the sentiment. Huge net outstanding positions which hit a high of Rs 2479 crore on Tuesday and the volatility in prices seen last week prompted the exchange to take precautionary measures. However, some dealers pointed out that these curbs would not be applicable on many shares, going by their current positions, but they would prevent speculators from building big positions.

FIIs were net buyers in software shares like Digital Equipment, Satyam Computers, Infosys Tech, Pentafour Software, NIIT besides other like Rhone Poule, E Merck, Ranbaxy and others. Foreign fund participation in the markets has been erratic in the last one month. Data from the Securities and Exchange Board of India showed they were net sellers of $ 38.4 million worth of equities in August. The trend reversed with buying worth $54.5 million in six straight sessions up to last Wednesday, but changed again with net selling of $35.2 million on Thursday.

A majority opinion polls issued before the voting started showed BJP and its allies were likely to get a clear majority, but many traders were less certain. “There is weakness in the market on the lower side, which means that traders see a sign that a majority may not come as expected," said an official of Parag Parikh Securities said.

Dealers doubted whether the market could sustain such high levels during the election period. In a thinly traded market, advancing stocks beat declining issues 941 to 480, while 98 remained unchanged at the BSE. The total traded volume was 58.79 million shares.

Specified shares like Pentafour, Satyam, BPL, United Phosp, Apollo Tyres, Escorts, GESCO, Century Textile, Indogulf Corp, Bombay Dyeing and ITC Bhadra were locked in the upper circuit filter. Of the 30 index-based scrips, 27 gained handsomely and only three eased moderately. The total volume of business was however sharply down at Rs 1503.12 crore as against last Friday’s turnover of Rs 2068.88 crore.