Sensex soars 236 pts on firm global markets

‘‘Apart from international cues, we had the small and mid caps being highly traded in today’s session,’’ said V.K. Sharma, head of research at Anagram Stock Broking Ltd.

Foreign funds sold Indian equities worth $44 million on Tuesday, taking their net investment made this year to about $2.6 billion from nearly $5 billion in early May. Fund managers said despite recent global equity slides, emerging markets were unlikely to enter a long slump and were still attractive.

Metal shares surged following a recovery in metal prices on London Metal Exchange. Bank shares rose on renewed buying. IT stocks rose following an over 1% surge in Nasdaq on Wednesday. L&T and HDFC spurted. However, Dr Reddy’s Lab declined sharply. Construction and sugar shares were in demand. The market-breadth was strong.

Key indices in Asia were up between 1-3%. US stocks rallied on Wednesday, driving the Dow up more than 100 points to a two-week high and pushing the Nasdaq up over 1% as strong earnings from Morgan Stanley and Fedex Corp renewed investors’ optimism about the outlook for corporate profits.

From a low of 8,929.44 struck on June 14, the Sensex has risen 1,346.44 points (15%) in the past 6 trading sessions to current 10,275.88. Bargain-hunting after a sharp setback in prices since mid-May 2006 and recovery in global markets aided the rebound.

The decline in global markets, unwinding of positions in derivatives segment, concerns that rise in domestic interest rates and fuel price rise would impact corporate profits and redemption pressure on fund houses caused a sharp fall on the bourses.