Markets rebound on FM, SEBI remarks; ICICI shines

Markets rebound on FM, SEBI remarks; ICICI shines
Sensex snaps losing streak, ends 265 pts up

MUMBAI: In a panic situation, the markets always look to the authorities for assurance. And the RBI, SEBI and finance ministry did just that on Tuesday, as the indices hit bottom in the early half of the day. Indian stocks made a stupendous recovery as players covered shorts following confidence building statements from the regulators and on a rebound in European markets.

Bombay Stock Exchange’s Sensex ended the day 264.68 points, or 2.10 per cent, higher at 12,860.43. Intraday, the 30-share benchmark touched a low of 12153.55, before it shot up to high of 12995.20—just 5 points short of the 13K mark. National Stock Exchange’s Nifty settled at 3921.20, higher by 71.15 points, or 1.85 per cent from Monday’s close. The index slumped to a low of 3715.05 and high of 3966.85 during the day.

Banking, realty and capital goods led the market rally while metal and FMCG ended in the red. European equities also bounced back on speculation US government’s financial rescue package will be reviewed. The US senate possibly will review the $700 bailout package as it is essential given the crash in global stock markets. Back home, RBI's assurance about ICICI Bank’s financial strength, SEBI chairman's comment that Indian markets are resilient and Finance Minister Chidambaram’s statement that Indian markets remain attractive, boosted investor sentiment. Chidambaram assured “there is nothing to worry about. The regulations that are in place are adequate. Regulation would be tightened if needed to deal with the consequences of a widening global financial crisis”. On the F&O front, Nifty October futures provisionally closed flat to spot, signaling investors aren't optimistic on the pull back rally. Call buying was observed from strikes 3900 to 4500. However, bears bought puts at 3900 and 3800. “Stocks which were beaten down most during recent sessions, like banking and realty, were picked up at attractive valuations. Fresh buying emerged in these counters. ICICI Bank, which was down 12% Monday, was among the top gainers. Monday's closing price of Rs 493 comes to 1.15(x) of BVPS. That is a valuation no fund manager can ignore,” said V Theegala, analyst at local brokerage. “Hopes of US bailout package also revived. Dow Jones futures, up 149 points, indicate a positive outcome. Indian markets, if helped by a dose of sentiment boost from US, will rally further,” Theegala added. Realty stocks like Orbit Corporation and Unitech, which were worst performers during recent sessions, went up by 8 per cent and 7 per cent, respectively. However, Ankit Sinha of Raxson Wealth is sceptical about the rally. “On Monday, players bought calls and went long on Nifty futures. Given today's pull back, it seems players safeguarded their long positions on speculation US will possibly come out with some solution. But, if US government fails to decide on a constructive rescue plan, we might slump Wednesday as de-leveraging may push markets lower,” Sinha said. Meanwhile, the cost of borrowing in dollars overnight surged after the US Congress rejected a $700 billion bank rescue plan, heightening concern more institutions will fail. London Interbank Offered Rate, or LIBOR, that banks charge each other for such loans, climbed 431 basis points to an all-time high of 6.88 per cent today, the British Bankers' Association said.

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Market rebounds on new US bailout hopes, FM, SEBI remarks
Sensex recovers nearly 700 points from day's low

Sensex just 58 points short of 13000, ICICI Bank lends support
No need to panic, action to be taken against violators: SEBI
Markets shrug off global blues; Sensex, Nifty in green
ICICI Bank has enough funds: RBI

Nothing to worry
P. Chidambaram assured investors that Indian market is 'sound and attractive' and promised them to take necessary action if needed ‘All Indian banks are safe’

US stocks: Futures rise on hopes for reviving bailout


Source:ET,Sify