Mumbai, May 3: A remarkable recovery in the markets after hitting a low of4109-level has rekindled hopes of better days ahead among market players,though they continue to be cautious about the volatility. On the back ofincreased fund buying and bargain hunting at lower levels, the Sensexrecovered more than 200 points to close at 4335.29, a net loss of 37 pointsagainst its previous close of 4372. With infotech stocks closing higher,market players feel that a revival is just round the corner.According to a BSE broker, if the market can sustain the same level with50-75 points fluctuations day-over-day, the volatility will get minimised.``This is extremely necessary for the investors to come back to themarket,'' said the broker. ``Thereafter, we can see a range-bound movementbut no bloodbaths,'' he added.
For a dealer with an institutional brokerage, the current level isattractive enough to enter. ``However, the only worrying factor is thevolatility,'' he added. ``Though the 8-plus-4 per cent circuit limit hashelped increase liquidity in the market, it has also increased thevolatility in the market.''
On Wednesday, in a mid-session rally, the markets recovered from the day'slow of 4109. According to market players, almost all the frontlinetechnology counters witnessed heavy buying at lower levels and this boostedthe sentiment. Also the news of tax-sops to pharma and biotech companiesboosted the market's sentiment during the fag end of the day. ``This gave abig boost to the pharma counters. Ranbaxy, Glaxo, Cipla, Dr Reddy's and SunPharma regained their day's loss and in no time a number of them hit the 8per cent upper circuit limit,'' said a dealer with a domestic brokeragehouse.
Market players are also waiting to see how mutual fund behave when themarkets go up. ``In all likelihood, mutual funds would sell at every riseand act as dampner to the market's rise,'' said a BSE broker.
On Wednesday, HFCL was one of the star performers on the bourses. After therecent relaxation in the ciruit filter limits, this was the first scrip totouch both - the lower and the higher end - of the circuit filter limitsintra-day. On Wednesday, the stock fluctuated the maximum permissible 24 percent and closed at the upper circuit limit of Rs 792.50 with 24.12 lakhshares changing hands. The lower circuit limit for the scrip was at Rs645.05. According to dealers, after hitting the lower circuit level, thescrip was gainining Rs 25 to Rs 30 every minute till it touched the uppercircuit limit of 8 per cent over Tuesday's closing price.
Digital Equipments, SSI, Sun Pharma, Cipla, Dr Reddy's and a host of othersricps also witnessed heavy volatility and closed at the 8 per cent limit asthe bourses closed before the stipulated half-an-hour cooling period wasover. Among the old economy stocks, the Reliance counter remained strongthroughout the day and witnessed purchases in chunks.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.