Sensex ends up 781pts, RCom gains 19%

MUMBAI: The Sensex opened with a huge positive gap of 290 points at 10,818, which turned out to be the low for the day. Sustained buying in heavyweights like ICICI Bank, Infosys and L&T saw the index zoom to a high of 11,361 - an intra-day gain of 833 points from the previous close of 10,528. The Sensex finally closed with a huge gain of 781 points (7.42%) at 11,309.

All the sectoral indices closed with gains. The BSE Bankex gained over 12%, and the capital goods index was up 10%. The market breadth was bullish - out of 2,670 stocks traded, over 1,685 logged gains.

RCom zoomed 19% to Rs 282. Reliance Infrastructure and ICICI Bank gained 17% each at Rs 602 and Rs 425, respectively.

Sterlite moved up 16% to Rs 318. HDFC Bank was up nearly 13% at Rs 1,180.

L&T gained 11% at Rs 988. SBI was also up 11% at Rs 1,502. BHEL, TCS, Hindalco, Satyam and Infosys closed with gains of over 7-11% each.

Total market turnover (BSE +NSE) was Rs 56,132 crore. ICICI Bank was the most active counter on the BSE with a turnover of Rs 490 crore followed by Reliance (Rs 249 crore) and Reliance Capital (Rs 157 crore).

Liquidity Picture

* FIIs net sellers of Rs 40,555cr since beginning of 2008

* FIIs net sellers of Rs 3,763.9cr till now in October

* FIIs have been net sellers for the last six months

* Domestic mutual funds net buyers of Rs 11,999cr since beginnning of 2008

* Domestic mutual funds net sellers of Rs 851.2cr till now in October

Finance Minister P Chidambaram’s pep talk early in the morning saw a sharp short-covering rally of 6-8% in key indices. Marketmen were expecting this rally after the sharp sell-off last week.

Most analysts agreed with the Finance Minister that this was a time to build long-term portfolio. Raamdeo Agrawal, joint managing director, Motilal Oswal Securities, said: "If you are a truly long-term investor and you're investing in good companies, then you should be holding in this bad time...These are times not to go further in cash but deploy  cash and buy in good companies at reasonable prices."

In the short-term though, since the market has bounced after retracing over 50% from the peak of January and after its worst-performing week, technical analysts say there should be some more juice left in this bounce. They are not ruling out the possibility of the Nifty hitting the 3,600-level this week.

Atul Badkar of Edelweiss Securities said: "If you take a long position, the target should be around 3,475 or a maximum of 3,500. Of course, for the Nifty, you have to keep your stop-losses in place... So, if at 3,580, you want to initiate long, then anything around 3,345 or 3,340 should be an immediate trigger for your stop loss."