Market shrugs off morning blues, moves into positive zone

After plunging deep into the red with an early morning loss of 558 points, the stock market staged a smart recovery, with the Bombay Stock Exchange (BSE) benchmark Sensex regaining the 17,000 points level by early afternoon today.

After regaining the 17,000 points mark, the 30-share BSE barometer was trading 64.03 points higher at 17,054.21 at 1240 hours.

Within minutes of opening this morning, the Sensex had dipped to as low as 16,432 points -- its lowest level since June 1, 2010 -- but it erased all its losses and moved into positive territory soon after mid-day.

Another benchmark index, the Nifty, was also trading 18.90 points higher at 5,137.40, after slipping below the 5,000 points level earlier in the morning.

Analysts said that buying at lower levels, a late recovery in the Asian markets and a positive opening in European markets helped lift the investor sentiment in India.

After falling 1,322 points in the past five trading sessions, the Sensex opened on a very weak note this morning, with heavy selling in stocks like Reliance Industries, Infosys, ICICI Bank and TCS.

However, a host of stocks such as ITC, HDFC, M&M, SBI, ONGC and BHEL recorded smart gains by early afternoon and others like RIL and Infosys also recovered from their lows.

The overnight meltdown in the US market and the continuing downtrend in Asia this morning had added to the woes of the Indian bourses.

Global markets have been in a turmoil for the past two days, after the creditworthiness of the US was downgraded by Standard and Poor's amid the American economy's mounting debt worries. The debt problems in Europe have already been hammering stocks across the world for about a week now.

Brokers said the Indian market was in oversold mode after the recent bear phase and an improving trend forced speculators to cover their pending short positions.

The recovery was backed by stocks of refinery and auto stocks on positive reports. Mahindra and Mahindra led the auto sector by rising 3.96 per cent to Rs692.40 on higher first quarter earnings.

Shares of oil marketing companies IOC, HPCL and BPCL recorded smart gains on optimism that sharply lower crude oil prices will help these state-run firms cut their losses on the sale of fuel.

Airline stocks such as Jet Airways and Kingfisher Airlines also gained after a steep fall in crude oil prices. Brent crude oil, the major oil price benchmark, slumped by 4.5 per cent to USD 99.06 a barrel today.