Date:29/10/2008 URL: http://www.thehindu.com/2008/10/29/stories/2008102955831600.htm

Business

Samvat 2065 starts on optimistic note

Sensex bounces back 498 points to end above 9000 taking cue from Asian and European markets

SEBI’s decision on creeping acquisition norms boost sentiment
Realty, banking, oil and gas sectors receive support

— PHOTO: VIVEK BENDRE

AUSPICIOUS BEGINNING: A young lady lighting a lamp at the Bombay Stock Exchange on the occasion of muhurat trading in Mumbai on Tuesday.

MUMBAI: Shrugging off the global meltdown witnessed in the last few weeks as a bad memory, the new year Samvat 2065 started on an optimistic note on Tuesday. The hour-long ‘muhurat’ trading commenced on a high and positive note with the benchmark Sensex recording over 498 points gain during the hour-long ‘muhurat’ trading.

Aided by the upward trend in global stock market led by Hong Kong which gained 16 per cent, the Bombay Stock Exchange benchmark Sensex, which had been on a long falling streak and plunged nearly 37 per cent in October, bounced back to close 498.52 points higher at 9008.08. It had touched the day’s high of 9056.97.

Similarly, the wide-based National Stock Exchange index Nifty shot up by 160.40 points at 2684.60, after hitting the day’s high of 2695.95.

The Sensex snapped a four-day losing streak during which it had tumbled by 2173.83 points or 20.34 per cent to nearly three-year low.

The rally in Diwali muhurat trading bucked the trend of ‘Black Diwali’ for the last five years.

The Sensex had settled 151 points down last Diwali although it recovered nearly half the total in intra-day loss of about 300 points.

Since last Diwali, when the Sensex had stood at 18907.60, the benchmark index has lost about 10400 points or over 55 per cent while more than Rs. 40 trillion has been wiped off from the investors’ wealth.

The new Samvat year trading received support from stocks in realty, banking, oil and gas, capital goods metal and auto segments. Domestic institutional investors, which were net buyers for the past several days, were believed to have made heavy purchases in blue chips. Indian bourses took a cue from a rebound in Asian and European stocks during the day while the U.S. futures indicated a rally in American stocks ahead of the Federal Reserve’s meeting on the interest rates.

The market sentiment was also boosted by market regulator SEBI’s decision to relax the creeping acquisition norms and to allow promoters to annually raise stake by 5 percentage point till their holding reaches 75 per cent.

Among the Asian indices, Hang Seng rebounded by 14.35 per cent, Nikkei by 6.41 per cent, Strait Times 4.14 per cent and Kospi by 5.57 per cent. The Germany’s DAX was trading higher by 8.78 per cent, France’s CAC by 2.89 per cent and London’s FTSE by 4.23 per cent during the first half of trading.

The market is expected to be volatile on Wednesday in view of the expiry of the current derivative series.

Analysts felt the market is unlikely to stabilise at the current levels due to panic situation and that it is yet to touch its bottom. The bellwether Sensex, however, has shown the biggest ever yearly fall of 10549.37 points or 55.35 per cent in the Samvat 2064.— PTI