Sensex rebounds 298 points to end in green; RIL, L&T, TCS up
18 October 2010
A recovery stepped in equity benchmarks in last one hour of trade, led by buying in oil & gas, power, realty, select technology and financial companies' shares along with L&T, Tata Steel and Tata Motors. The Sensex as well as Nifty closed above their psychologically important levels - 20,000 and 6,000, respectively.
The Nifty had started the sell-off since Thursday, which could be because of Coal India's issue - a largest issue in Indian capital markets' history (the government aims to raise more than Rs 15,000 crore through IPO). Today at some point of time, it was looking like that the Nifty would see further sell-off when it broke 6000 level and touched a low of 5985.10. It struggled a lot at this level during the day but short covering in last one hour of trade and buying in heavyweights pushed the index above 6K, after showing 91 points recovery from day's low. Even the Sensex recovered 298.38 points.
However, selling remained in cement and FMCG companies' shares along with Bharti Airtel, Wipro, Tata Power, ICICI Bank, Maruti, Sterlite, M&M, Cipla, Sesa Goa, Hindalco, SAIL, BHEL and HDFC though they recovered from day's low.
Devang Mehta, Head - Equity Sales Retail at Anand Rathi Financial Services said this could be a temporary phenomenon (due to Coal India IPO), which could last for the next two-three days. "There are a lot of technical factors which are guiding this fall. First of all, we have seen a great rally into market leading to almost new highs. But what we are seeing right now is the increased appetite for the Coal India IPO, which finds a lot of people wanting to participate in the India long-term growth story and to participate in a largecap stock like this. If at all people are selling and making good profit in the secondary market investments then this is worth investing in a good IPO quality paper like Coal India. This can be a temporary phenomenon which can last for the next two-three days," he explained.
The 30-share BSE Sensex closed at 20,168.89, up 43.84 points and the 50-share NSE Nifty rose 13.30 points to 6,075.95. The Nifty October futures ended at a massive premium of 55.5 points, as per provisional data.
Heavyweights like Reliance Industries and ONGC rose 0.7% and 1.8%, respectively. Cairn India and BPCL went up 0.6%; GAIL up 0.35%. Tata Steel from metal space was up 1.6% while Sterlite Industries, SAIL, Hindalco and Sesa Goa fell 0.4-1.2%.