(RTTNews) - Friday, the Indian market made a surprise bounceback despite certain amount of volatility during the day. Large scale buying activity was witnessed in stocks belonging to sectors like banking, IT, power, oil/gas and capital goods companies. However, Realty stocks, ended sharply lower for the day.

After opening almost flat this morning, the market rallied in early trading, tracking the recovery in the rest of the Asian markets after the Bank of Japan kept its key interest rate unchanged, even as it noted the outlook remains highly uncertain and it would “take some time for the necessary conditions for Japan economic recovery to be satisfied.”

Thereafter, the market surged further on account of short covering and some value buying. Hopes of a further rate cut by the RBI also added to positive momentum.

In the afternoon, the market pared almost all its gains on account of profit taking and the week-end considerations, but soon made a come-back, triggered by a surge in US index futures and advances in the European markets. Heavy buying in select index heavyweights pushed the key indexes even higher towards the close of the session.

Analysts said that better-than expected profit announcement from Dell, the world’s No. 2 PC maker, and an announcement from Fannie Mae and Freddie Mac, the two biggest home loan finance companies that they would suspend foreclosures of occupied homes until early 2009, have led to a revival of investor sentiment across the global markets.

The BSE Sensex opened at 8,447 and rose further to 8,988 during the day before paring some of is gains to finish at 8,915, up 464 points or 5.49%. The S&P CNX Nifty index ended at 2,693, up 140 points or 5.50%.

The broad-based BSE 500 index rose 3.79%, while the midcap and the smallcap indexes gained less than 1% each.

On the BSE, the Sensex futures ended at a premium of 105 points to the benchmark. However, the market breadth was slightly negative, with 1293 decliners as against 1177 gainers.

Some analysts termed the rally as a technical bounceback, while others said that at its current levels, the market is nearing the end of a bear trend.

Meanwhile, Prime Minister Manmohan Singh reiterated that India would sustain a growth rate of eight per cent despite the adverse impact of the global financial crisis. “The global economy is passing through a deep crisis. We cannot pretend that we are not affected by it,” Singh said on Friday at the Hindustan Times Leadership Summit in New Delhi.

Reliance Infrastructure (up 14.07%), Reliance Communication (up 13.64%), Sterlite Industries (up 9.10%), NTPC (up 8.80%), HDFC (up 8.49%), State Bank of India (up 8.29%), TCS (up 7.89%), BHEL (Up 7.29%), Larsen & Toubro (up 6.75%), Reliance Industries (up 6.49%) and ONGC (up 6.10%) were some of the prominent gainers.

However, DLF (down 3.41%), Jaiprakash Associates (down 2.18%), ACC (down 2.08% and Tata Power (down 0.47%) ended in the red.

Stocks in News

Realty stocks continued their downward trend as investors dumped stocks fearing that the sector could underperform the market over the next few months.

Reports that the government could clamp down on overseas special purpose vehicles of these companies set up to carry out businesses in other countries, also weighed on investor sentiment. Unitech, Penland, DLF and Ansal Infrastructure were some of the notable decliners.

IT stocks rose sharply as the rupee was trading near its record low against the dollar. TCS climbed 7.89%, Infosys jumped 5.10%, Wipro added 4.64% and Satyam Computers rose 3.08%.

Alok Industries ended down 0.34% after the company decided to put on hold a textile SEZ project in Silvassa. Other textile stocks, such as Welspun India plunged 6.15%, while Raymond rose 2.27% and Arvind surged up 4.0%.

State Bank of India soared 8.29% after the bank said that it has received nod from the RBI for its proposed joint venture with a unit of French bank Societe Generale. ICICI Bank gained 4.74% after Sebi on Thursday said it has found no evidence of manipulative trading in the bank’s shares between September 8 and October 8 this year.

In general, banking stocks received good buying support across the board following hopes that the RBI will announce another round of rate cuts in the near term. Kotak Bank, Punjab National Bank, HDFC Bank, Karnataka Bank, Allahabad Bank and Bank of Baroda were the major gainers from the banking sector.

Eicher Motors advanced 2.74% to Rs.221.55 after its board of directors approved to buy back around 1.4 million shares at a fixed price of Rs.691.68 per share. Maruti Suzuki gained 5.90% after the company launched ‘A-star,’ its eighth new model in the last 40 months. Analysts said the model would help Maruti improve its market share.

Oil and Natural Gas Corporation (ONGC) surged up 6.10% after the company along with its partners won 20 oil and gas exploration blocks out of the 44 blocks that have been awarded under the seventh round of the New Exploration Licensing Policy (NELP - VII).

GVK Power & Infrastructure also climbed 13.28% after it bagged seven deep-sea blocks that were awarded under the government’s NELP. Selan Exploration Technology rose 1.83% after the company’s board of directors approved to buy back its shares at a price not exceeding Rs.230 per share.

Asian Markets

Markets across the Asia-Pacific region ended mostly higher after paring their early losses on account of higher US index futures, short covering and value buying on hopes that the markets could have become oversold.

Hong Kong’s Hang Seng index rose 2.93%, Japan’s Nikkei 225 index advanced 2.70% and South Korea’s KOSPI climbed 5.80%, while China’s Shanghai Composite index ended down 0.72%.

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