Fresh Fii Buying Triggers Off Rally
The rally was triggered off by heavy buying by foreign institutional investors (FIIs), mainly in banking and automobile stocks.
However, there were rumours about heavy speculative buying on the Calcutta Stock Exchange, which had a positive impact on stocks at other exchanges.
The rally was led by State Bank, which registered sharp movements.
The counter opened at Rs 261.25, touched a high of Rs 274.75, dipped to a low of 254.25, before winding up at 273.25. News about clearance of its global depository issue (GDR) issue was the chief reason for the rise in the State Bank stock.
Market circles say that in a bid to make the GDR offering somewhere above Rs 300 per share, two leading FIIs issued buy orders in a bid to push the price up.
Brokers said that, at one point of time, there were pending buy orders for 20 lakh shares against selling orders for about less than 10,000 shares on the National Stock Exchange.
The market was agog with rumours that bear operators had resorted to buying after the Sebi investigative team arrived in the city to probe into the short-selling operations of some members.
The Sensex, which opened slightly weaker yesterday, crossed the 3,400-mark during the day to touch a high of 3421.20, before settling at 3414.01.
The NSE-50, which had closed at 971 on Tuesday, opened higher at 973, reached a high of 997 before closing at 994.
Beside foreign institutional investors' buying, there was overall support in the market yesterday.
This, brokers said, was what pushed the pivotals up.
Turnover on the National Stock Exchange stood at Rs 1076.88 crore with 5.05 crore shares being traded, while the Bombay Stock Exchange clocked a turnover of Rs 340.71 crore with about 88.39 per cent of it being the contribution by A group stocks. On the NSE, while SBI and Reliance continued to lead the turnover list, on the BSE, Tisco continued to be on the third spot with SBI and Reliance topping the turnover list.
Another reason for the rise in indices was said to be the arbitrage opportunity in the morning session as the BSE had remained closed on Monday and Tuesday, and the pivotals had taken a beating on NSE during the two days.
However, market sources feel that the rally is shortlived and that indices might remain steady for next two to three days.
Other pivotals which moved up yesterday were BSES, Hindustan Lever, Hindalco, ITC, L&T and Tata group stocks. On the Calcutta Stock Exchange, brisk bear-covering right from the start provided for a perceptible improvement of the index today.