Indian equities end in green after volatile day

IANS
Posted: Monday, October 20, 2008, 08:23 am EST

Mumbai: Indian equities markets opened strong Monday, went sharply upwards and despite a late
afternoon slide still closed in the green on a rate cut by India's central bank, the Reserve bank of India.

The positive finish Monday came after three successive days of losses last week that had seen a key
index dip to the four-digit level for the first time in over two years.

At the close of trading the sensitive index (Sensex) of the Bombay Stock Exchange finished at 10,223.09,
up 247.74 points or 2.48 percent from its previous close Friday at 9,975.35 points.

The Sensex opened at 10,160.47 points, rallied to touch an intra-day high of 10,538.05, a gain of 562.7
points or 5.64 percent against its previous close before sliding again.

At the National Stock Exchange, the broader 50-share S&P CNX Nifty index also showed a similar trend -
opened strong, rallied and then dipped even below its previous close Friday before recovering again to
end in the green.

At close of trading the Nifty was at 3,122.80, up 48.45 points or 1.58 percent from its previous close
Friday at 3074.35 points.

The Nifty had also moved up by more than 250 points before sliding.

The BSE midcap index closed at 3,506.35, down 38.49 points or 1.09 percent from its previous close
Friday at 3,544.84 points.

The BSE smallcap index finished at 4,112.82, down 55.04 points or 1.32 percent from its previous close
Friday at 4,167.86.

Analysts said the initial rally was on short covering as there was news that the market regulator was
contemplating a ban on short sales. Besides, there was enough profit opportunity as the Sensex had slid
by nearly 2,000 points over the last week.

They said that midcap and smallcap stocks had ended in the red indicating there was no depth in the
recovery and whatever rally took place was only because of short covering.

“But there is still too much uncertainty and while you can price risk, you cannot price uncertainty, so any
rally we may see may be short-lived,” said Jagannadham Thunuguntla, head of the capital markets arm
of India's fourth largest share brokerage firm, the Delhi-based SMC Group.

“There is still no confidence in the market and no one is willing to lend or invest,” said Gautam Mazumdar,
chief underwriting officer of HDFC ERGO General Insurance Co. Ltd.

--- IANS