Sensex up 338 pts,but FIIs continue selling

Though the market started on a shaky mode following the release of weak industrial production numbers.

After losing over 1,350 points in the last 6 trading sessions,the Sensex recovered on Wednesday on bargain hunting amid strong cues from global peers.

Though the market started on a shaky mode following the release of weak industrial production numbers,stocks made a smart comeback despite selling by foreign funds. The BSE Sensex showed a highly volatile movement and swung in the range of over 526 points,before settling at 19,534.10,up 337.76 points or 1.76 per cent from the previous close. The National Stock Exchanges wide-based Nifty also went up by 109.15 points or 1.90 per cent to settle at 5,863.25.

FIIs sold stocks worth Rs 371 crore. With this,FIIs have pulled out over Rs 3,500 crore in the last four days. However,domestic institutions averted a bigger slide as they purchases stock worth around Rs 3,400 crore during the same period.

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Bulls finally showed that they may be down but certainly not out. After taking a drubbing over the past seven trading sessions,the Indian market bounced back with a vengeance,notwithstanding the downbeat IIP data and reports of CBI raids on top PSU banks. In fact,it was the first major day of gains in the new year for the Indian benchmark indices. The rally could be attributed partly to short covering and firm global cues. Investors and traders snapped up beaten down stocks after the recent reversals, said Amar Ambani,Head of Research,IIFL.

Realty stocks rebounded after being among the top losers in the past few days. The BSE Realty index gained more than 4 per cent,while the metals and the banking indices also were among the prominent gainers. The broader indices also participated in the relief rally today with the BSE Mid-Cap and the Small-Cap index rising 1.6 per cent and 1.4 per cent respectively.