Equities rally smartly on FII buying, Sensex up 148 points

MUMBAI, JULY 25. Equities rallied smartly and the Sensex recovered sharply by over 316 points from the day's lows on the Bombay Stock Exchange today in the wake of heavy purchases by foreign institutional investors, prompted by the positive change in the political situation.

The BSE sensitive index had dipped to a low of 4052.61 at the early stages. However, encouraging political news injected fresh interest aiding the Sensex to bounce back to close at 4336.20 against yesterday's close of 4188.34, netting a sharp rise of 147.86 points or 3.53 per cent. The BSE-100 index spurted by 100.04 points to 2203.02 from 2102.98.

The FIIs, which had been continuous net sellers during the last settlement on reports of a possible arrest of the Shiv Sena chief, Mr. Bal Thackeray, which had led to resignations by four Union Ministers, went for fresh purchases today with the dismissal of the case against Mr. Thackeray.

Financial institutions led by Unit Trust of India too were heavy net buyers in infotech stocks. In a strong bear phase for the past eight sessions since July 13, the benchmark had lost over 775 points making a technical correction necessary for the market's good health. The positive political development provided an opportunity for operators to cover their short sold positions.

Initially, the possibility of arrest of Mr. Thackeray coupled with a sharp fall of 108 points in the Nasdaq composite index had unnerved operators. Market sources have turned optimistic with today's sharp turnaround saying, ``The market seems to have bottomed out and it will go up gradually if there is no adverse news".

- PTI

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