06-10-2006, 02:41 PM
<b>Sensex rebounds 515 pts on support from funds</b>
MUMBAI: Stock market investors who were getting used to looking southward day after day for almost a month now, was treated to a surprise on Friday.
After crashing over 1,150 points in four consecutive sessions this week, the BSE sensex made a grand reversal during the day and closed a record 515 points higher at 9,810.
Backed by strong buying by foreign as well as domestic funds, and some late short covering, the index recorded its biggest singe-day gain ever on Friday. The rally led to a Rs 1.7 lakh crore addition to investors' wealth with BSE's market capitalisation now at Rs 25.2 lakh crore: also an all-time record.
Although the day's record breaking rally has brought some much needed relief to the battered investor sentiment, market players nonetheless are advising caution.
"It's early days and so pre-mature to say that we have seen the bottom,"said Manish Kanchan, CEO, Ambit Capital. Agrees Ambareesh Baliga, V-P, PCG, Karvy Stock Broking.
"We have moved from over exuberance to desperation (to get out) in a very short span of time. We still have some cautious days ahead,"Baliga said.
From a high of 12,671 on May 11, the sensex was down to this year's lows on Thursday and then came Friday's record upswing.
For investors, the crash till Thursday meant a loss of nearly Rs 11 lakh crore in less than a month. The recent crash has also forced most of the speculators out of the market inflicting heavy trading losses.
It has also brought down derivative positions built with borrowed money to negligible levels, market players said.
FIIs and some local funds bought some respite for investors before the weekend.
While value buying at bitten down prices by these two influential investor groups led to the 515-point sensex rally on Friday, some end-of-the-day short covering by speculators too helped the index gain some extra points towards close of session, market players said.
Last month it were the FIIs who started taking money off the table because they found they could get high risk-free returns in the US compared to risky returns in emerging markets like India, Brazil and others. In June however, the selling was mostly by mutual funds to meet increasing redemption pressure.
Source: IndiaTimes.com
[EDITED - Admin]
MUMBAI: Stock market investors who were getting used to looking southward day after day for almost a month now, was treated to a surprise on Friday.
After crashing over 1,150 points in four consecutive sessions this week, the BSE sensex made a grand reversal during the day and closed a record 515 points higher at 9,810.
Backed by strong buying by foreign as well as domestic funds, and some late short covering, the index recorded its biggest singe-day gain ever on Friday. The rally led to a Rs 1.7 lakh crore addition to investors' wealth with BSE's market capitalisation now at Rs 25.2 lakh crore: also an all-time record.
Although the day's record breaking rally has brought some much needed relief to the battered investor sentiment, market players nonetheless are advising caution.
"It's early days and so pre-mature to say that we have seen the bottom,"said Manish Kanchan, CEO, Ambit Capital. Agrees Ambareesh Baliga, V-P, PCG, Karvy Stock Broking.
"We have moved from over exuberance to desperation (to get out) in a very short span of time. We still have some cautious days ahead,"Baliga said.
From a high of 12,671 on May 11, the sensex was down to this year's lows on Thursday and then came Friday's record upswing.
For investors, the crash till Thursday meant a loss of nearly Rs 11 lakh crore in less than a month. The recent crash has also forced most of the speculators out of the market inflicting heavy trading losses.
It has also brought down derivative positions built with borrowed money to negligible levels, market players said.
FIIs and some local funds bought some respite for investors before the weekend.
While value buying at bitten down prices by these two influential investor groups led to the 515-point sensex rally on Friday, some end-of-the-day short covering by speculators too helped the index gain some extra points towards close of session, market players said.
Last month it were the FIIs who started taking money off the table because they found they could get high risk-free returns in the US compared to risky returns in emerging markets like India, Brazil and others. In June however, the selling was mostly by mutual funds to meet increasing redemption pressure.
Source: IndiaTimes.com
[EDITED - Admin]