Day after, it’s 515-pts up

Stocks shrugged off the possibility of a slowdown in demand due to rising interest rates, to register the Sensex’s biggest single-day points gain since March 1992, but the index still ended 6.1% lower for the week.

The BSE index had fallen nearly 27% since a May 11 all-time peak as global investors trimmed emerging markets positions on expectations of rising interest rates in the US. ‘‘What we are seeing is an irrational behaviour in the market. Small selling or buying is causing the market to react,’’ added Angel Broking’s managing director Dinesh Thakker.

The bulls wielded so much influence in today’s trade that, except for the 25-point slump at the opening, the benchmark index did not relent throughout the day. Voracious buying by domestic funds and retail investors helped shares to recoup part of the ground ceded during the last four sessions on frenzied selling. The foreign funds also bought shares while mutual funds were busy accumulating their portfolio.Of the 30 Sensex components, 29 finished in the green. The S&P CNX Nifty index finished with a spurt of 142 points (5.21%), to 2,866.30. The benchmark index spurted to 9,849.20, in the last session of trade, as buying momentum soared.

Today’s rally was broad-based with stocks from small-cap, mid-cap and large-cap participating. This was the key reason for the market-breadth being positive. In the past few day’s, the market breadth was dismal as small and midcap stocks tumbled on low volumes. The BSE mid-cap index jumped 5.69% while the BSE small-cap index surged 4.57%.

Despite the rebound, traders and fund managers warn that the gains may be deceptive and may not indicate a trend reversal. ‘‘You cannot say that we are on the uptick again,’’ said Prasad Nalam, Chief Investment Officer at Sundaram Mutual Fund. ‘‘This kind of volatility itself shows that there’s still some uncertainty.’’