Market makes strong comeback

MUMBAI — The market made a strong comeback yesterday. The Sensex had surged over 500 points at of time in late trading, to breach the psychologically important 13,000 level. Strong Asian markets triggered a rebound on the domestic bourses, which had seen a huge value erosion over the past few days. Short-covering in derivatives aided the surge.

By Our Correspondent

Published: Fri 9 Mar 2007, 9:48 AM

Last updated: Sat 4 Apr 2015, 10:47 PM

Blue-chips rose almost across-the-board, and a host of small-cap and mid-cap shares too were in demand. Cement, banking shares, power equipment makers, construction, telecom shares and pharma pivotals led the charge.

The 30-share BSE Sensex vaulted 469.60 points (3.7 per cent), to 13,049.35. It was the biggest single-day point rise in the Sensex recorded since mid-June 2006. On June 15, 2006, the Sensex had spurted 615.62 points to 9,545.06 from a closing of 8,929.44 on June 14, 2006. Once again, the trigger came from the overseas market. It was a rebound in global markets, which had lifted the Sensex on June 15, 2006.

The S&P CNX Nifty jumped 134.80 points (3.7 per cent), to settle at 3,761.65. The Nifty March 2007 futures were at 3,768.80, compared to the spot Nifty closing of 3,761.65.

Yesterday, Asian markets extended their recovery from a recent steep fall triggered by steepling losses in Chinese stocks and jitters about health of the US economy. Key benchmark indices in the region were up 1-2 per cent. Domestic bourses had recovered on Tuesday when Asian markets first recovered from the steep fall. However, they had declined on Wednesday in volatile trade.

Indian stocks had tumbled in the last few days due to a sell-off in global markets, with the Union Budget 2007-08 of February 28, 2007 only compouding their woes. The fall was accentuated as margin calls were triggered. The Sensex had tumbled 541 points on Budget day itself. The market had recovered the next day (on March 1, 2007) on the back of a rally in IT shares under a reckoning that their earnings will be impacted only to a small extent following an increase in tax in the Budget. The Sensex had surged 221 points, to 13,159.55 on March 1, 2007. However, a sell-off had gripped the bourses again, which saw the Sensex hurtle down to 12,415.04 on March 5, 2007.

While there was no cut in the 10 per cent corporate surcharge as expected, the dividend distribution tax was raised to 15 per cent from 12.5 per cent. The Budget also raised direct/indirect taxes for cement, construction and IT sectors.

In today's trade, the BSE Small-Cap Index gained 157.50 points (2.5 per cent), to 6,245.81. The BSE Mid-Cap Index gained 132.38 points (2.5 per cent), to 5,246.79.

All sectoral indices on BSE had gained. The biggest gainer in percentage terms was the BSE Metal Index. It jumped 356.52 points (4.58 per cent), to 8,132.68. The BSE Capital Goods Index gained 376.84 points (4.51 per cent), to 8,730.82. BSE's banking sector Bankex rose 275.69 points (4.45 per cent), to 6,466.36.