The Hindu Business Line : Sensex zooms 878 points on SEBI clarification

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Sensex zooms 878 points on SEBI clarification

Registers highest gain in 15 months in point terms

Our Bureau

Mumbai, Oct 23 Market regulator SEBI’s clarifications on participatory notes appeared to have fired up the markets on Tuesday, giving the Sensex its highest gain in 15-months in point terms.

The benchmark index gained 878.85 points or 4.99 per cent to close at 18492.84. The S&P CNX Nifty advanced by 5.6 per cent.

The markets opened strong on Asian cues, and there was a lot of short covering for the first two hours, said Mr Deven Choksey of KR Choksey Securities.

“Towards the end, it was institutional buying throughout. The FIIs today rebought what they had sold after the initial SEBI announcement restricting FII investments through P-Notes,” he said. People were also playing safe in view of October contracts expiring this week.

Overall, SEBI’s clarification that sub-accounts could register as FIIs, and without a restriction on their numbers, brought a lot of confidence to the players, making it a “positive reaction day,” he said.

“The general feeling matters more than reality, and investors are just looking for pockets of comfort,” said another broker with a leading securities firm.

FIIs were net buyers for Rs 390.7 crore on the BSE and NSE, provisional figures showed. (They have been net sellers on the two exchanges for the last four trading days, including Monday, when the markets rose modestly.) Domestic institutions were net buyers for Rs. 37.64 crore. Individuals were net sellers for Rs. 185.92 crore.

“FIIs bought aggressively today as the current P-note policy will expire by October 25. It was strong buying coupled with short covering. A good amount of buying in the mid-cap segment too,” said Mr Amitabh Chakraborty, President, Equity, Religare Securities.

With the ruling party and its allies postponing their meeting on the Indo-US nuclear deal, investors felt they could buy time, said Mr Vishwas Agarwal, Independent Technical Analyst. “But it was not a volume-based rise, as there wasn’t much volumes today.”

On BSE, the turnover was Rs 7,418.15 crore, a little lower from Monday. On NSE, the value of shares traded was higher, Rs 17,657 crore (Rs 15,736.30 crore).

Rumours that there will not be a CRR hike drove up banking stocks. Power stocks advanced, REL leading with a 11.2 per cent gain. All the BSE indices rose without exception, the largest gainers being Capital Goods, PSU, Metals, Oil & Gas, Metals and Realty.