Business

Equities stage smart recovery

MUMBAI: Stock markets staged a smart recovery on Friday with the Bombay Stock Exchange benchmark Sensex closing the day higher by 743.55 points as investors rushed to buy blue-chip stocks which were available at low prices. The 30-share BSE sensitive index (Sensex) closed up by 743.55 points at 9788.06. The National Stock Exchange index, 50-share Nifty, also closed up by188.55 points at 2885.60.

“Investors bought stocks, especially the front-line stocks, and there was also short covering,” said S. Ranganathan, Head of Research, LKP Securities. According to him, “certain stocks were hammered ridiculously and such stocks are bouncing back now.”

Global events like Japan’s move to cut interest rates for the first time in seven years on Friday and U.K. banking giant Barclays’ plan to raise $12 billion in capital boosted sentiment. The Bank of Japan’s move followed a rate cut from the U.S. Federal Reserve earlier in the week.

In the domestic market, participants were optimistic that the central bank was also likely to cut rates as inflation was falling below 11 per cent. Inflation has come down to 10.68 per cent for mid-October. Rating agency Standard & Poor’s reaffirming stable outlook for India also intensified buying support.

Metal stocks led the rally by gaining 10.20 per cent followed by oil and gas (9.11 per cent) and bank stocks (7.21 per cent). The BSE midcap stocks gained 3.41 per cent, smallcap 2.46 per cent and the BSE-500 6.55 per cent.

Analysts said impressive rally can be construed as recovery after relentless selling for about a month in tune with weak trends in bourses across the world. Markets had fallen by a huge 23 per cent this month.

Wall Street also ended on a positive note on Thursday shrugging off decline economic growth. Experts said fall in GDP growth was less than expected.

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