MUMBAI, June 8: Even as the Securities and Exchange Board of India (SEBI) hurriedly convened a meeting of the top officials of the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) to take stock of the bear run on the stock markets, Sensex staged a smart intra-day recovery of 157 points on the Bombay Stock Exchange (BSE) on Monday.In fact, sensex witnessed one of the wildest swings on a single day in recent times. The range was as wide as 200 points on the sensex scale. At the end of the day it was back to square one, with the sensex regaining 157 points as much as it had lost earlier in the day. Bears had to give in at last, when, as it was believed widely in the market, Morgan Stanley stepped in with huge orders.When Sensex plunged to a low of 3259.53 in the morning session, Sebi decided to take stock of the situation and called a meeting of the top officials of BSE and NSE. Bears made a hasty retreat at this stage, paving the way for bulls to take control of the situation. Whatprompted bears to pull out was rumours of special margins on short sales. Financial institutions, especially UTI, also chipped in and bought index-based scrips in a big way.As a result, sensex bounced back from the crucial level of 3,259.53 to close at 3,416.73 registering a smart recovery of 157 points on the back of attractive valuations. The final index level is only small loss of 1.16 points over Friday's close.Morgan Stanley was rumoured to have bought huge chunks of heavy-weight stocks like ITC and Bhel, which helped the market rebound by over 45 points during the last phase of the session. The historic recovery of 70 points in three minutes between 2.30 pm and 2.45 pm was marked by a sharp rally on ITC from Rs 604 to Rs 650, which according to sources, was on the basis of buy orders put forth by Morgan.The special margin did not happen, as the regulator felt that there was no danger to the market and that the existing price bands, daily and weekly, needed no relaxation. Besides, the stockexchanges also felt the market has not gone out of hand to warrant any drastic step.Market sources pointed out that a cartel of BSE brokers, who have played havoc with the market, are behind the index plunging below the 3,600 levels to trade at a low of 3,200 levels. "The entire operation which was partly conducted through BSE and Calcutta brokers had been designed to enable short sale of huge positions under the pretext of FII sales, which created panic in the market and added fuel to the downward slide," said a BSE broker."Apart from UTI and other institutional buying emerging later in the day, some FIIs also put in buy orders in key counters. FIIs cannot get out at lower levels," said Vipin Agarwal of DBS Securities. Hectic buying in Bata, Shipping Corporation and SBI was also attributed to Morgan Stanley brokerage house and John Govett, which according to market sources, was in the form of cross and bulk deals.Technical analysts pointed out that the sharp turnaround by the sensex, has brought itat the 1997 pre-budget level of 3,474.79. Pivotals are found to be trading at attractive valuations and could therefore provide an entry point for retail investors.That the market is still in the bear grip is clearly evident from the top ten losers in BSE's A group who have closed at their day's lows. Most of these scrips do not form part of the sensex, which again goes to show that it was the day of operators playing the index up and down.
