Investors flock to buy cheap stocks

The Bombay Stock Exchange benchmark Sensex partly made up for the previous session’s losses, rising 260 points on 22 August on emergence of buying by funds amid firm Asian markets and gains in US stocks.

The market remained volatile on aggressive bouts of buying and selling, which took the index to a high of 14,281 and low of 13,870 points during the day.

The Sensex, which had tumbled 438 points on 21 August on political concerns, gained 259.55 points to close at 14,248.66 as buying interest revived in fundamentally strong stocks led by shares in capital goods, metal and oil and gas sectors.
Similarly, the wide-based National Stock Exchange’s Nifty gained 78.25 points at 4,153.15 after touching a high of 4,165.70. The Nifty had fallen to 4,040.15 in morning deals.

The market gained as Asian stocks rose on the back of fourth day of gains in US stocks yesterday, while discounting the political crisis brought about by the Indo-US nuclear deal at home.
As the market turned bullish, capital goods segment index spurted the most by 407.53 points at 12,397.50 followed by metal index by 234.18 points at 10,081.33. Oil and gas index shot up by 103.31 points at 7,511.33 and PSU index by 81.97 points at 6,573.94.
Bank index rose by 63.62 points at 7,387.92, Teck index by 63.16 points at 3,421.97, IT index by 53.67 points at 4348.53 and FMCG index by 42.85 points at 1,841.90.
However, realty, healthcare, consumer durables and auto sector stocks remained weak.
Mid-day
In volatile trading, the benchmark Sensex surged over 291 points at midsession on the Bombay Stock Exchange on 22 August on emergence of buying by funds amid brokers covering their short positions.
The key index moved in a wide range of 14,280 and 13,870 points on heavy alternate bouts of trading in fundamentally strong stocks led by heavy-machinery and information technology company stocks.
The Sensex gained 291.22 points at 14,280.33 at 1300 hours, while the wide-based National Stock Exchange’s Nifty gained 87.50 points at 4,162.40. The Nifty had fallen to 4,040.15 in morning deals.
The Sensex had plunged 438 points on 21 August on political developments over the nuclear issue after the last week’s bearish trend over widening sub-prime mortgage problems in US markets.
“The fresh firmness in the market came on speculations that the US Federal Reserve cutting the discount rate might help the market to defuse a crisis in the credit markets and revive demand for riskier assets like equities, Mumbai-based broker Ratnesh Gupta said.
Asian stocks rose on the back of rebound in US stocks for the fourth day yesterday, giving positive signals to the Indian markets, even discounting the political crisis at home, Gupta said.
Reliance Industries, which has the world’s third biggest refinery and is the heaviest on the Sensex, jumped Rs8.15, or 0.5%, to Rs 1,755.5.
Infosys Technologies rose Rs10, or 0.6%, to Rs1,771. India’s second-largest software exporter expanded into Latin America by setting up a software development and sales unit in Monterrey, Mexico. These two companies carry almost one-fifth of the total weightage on the Sensex.
Opening
The benchmark Sensex on 22 August recovered by over 178 points in early trade on the Bombay Stock Exchange on revival of buying by funds even as some investors were covering short positions.
The Sensex, which tumbled nearly 438 points in yesterday trade, bounced back to gain 178.5 points to 14,167.61 in first five minutes of trading.
Similarly, the wide-based National Stock Exchange’s Nifty recovered by 49.25 to 4,124.15 as most of the index stocks jumped up on fresh buying.