Indices close higher after intra-day volatility

After yesterday's bloodbath, markets opened firm as beaten down frontline stocks tried to bounce back. The Sensex which gained more than 40 points early in the morning slid into negative territory and soon was trading 30 points lower than yesterday's close. Strong gains in some of the frontline stocks pulled the indices back into the green by noon. These gains were given up by afternoon as no serious buying emerged and markets dropped to the lowest levels for the day. However, indices staged a smart rally in the last half hour of trade to close in positive territory. Sensex closed at 6381, up 13 points and the Nifty at 1994, up 10 points.

Among index stocks HDFC and Tata Power were the biggest gainers while Ranbaxy and GAIL were the major losers.

Yesterday's weakness in the Asian markets affected the US indices as well. Both Dow and NASDAQ lost close to a per cent each with the NASDAQ closing at a 5 month low. Crude oil futures rose marginally to $54.23 as OPEC denied reports that it is raising output further.

All Indian ADR's lost substantially and ICICI Bank led the way with losses of more than 6 per cent. Tech shares Infosys, Wipro and Satyam had a particularly bad day with losses of more than 2 per cent each following the weakness on NASDAQ. MTNL, VSNL, Tata Motors, HDFC Bank and Dr. Reddy's also closed with losses.

Yesterday SEBI issued revised guidelines for public issues under which the percentage allocation to retail investors has been increased to 35 per cent from the earlier 25 per cent. The amount of investment for being considered as a retail investor has been raised to Rs1 lakh from the earlier Rs50 thousand.

SBI management is confident of maintaining growth as it sees no slowdown in momentum for the economy. The bank feels that the interest outlook is stable unless there is a major rise in inflation because of higher oil prices. The stock gained close to 3 per cent.