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Crash Takes a Break

Recovery in the second half of the week helped equity markets regain some of its lost glory in the week ended June 16, 2006. The BSE Sensex added 0.75 per cent to close at 9,884 levels

Recovery in the second half of the week helped equity markets regain some of its lost glory in the week ended June 16, 2006. The BSE Sensex added over 955 points on Thursday and Friday to end the week up 0.75 per cent at 9,884 levels. The Nifty gained 0.84 per cent. Among the broader indices, the S&P CNX 500 added 0.42 per cent, while CNX Midcap index dropped 0.78 per cent over the week.

Markets had a poor start to the week with the Sensex falling over 3 per cent. Heavy selling in banking and metals stocks led the sentiments down, as even good industrial production data failed to impress investors. Debutant Airline Deccan ended the day below their offer price.

The poor run continued on Tuesday. The Sensex fell more than 4 per cent to touch their six-month low levels. This time, weaker global markets and concerns on higher interest costs triggered a fall.

The slump continued for the third straight day on Wednesday when the 30-stock BSE Sensex slipped over 130 points. Last few days of sharp fall made the investors worried as they resorted to heavy selling, bringing the index down.

Equity markets saw a turnaround on Thursday. The Sensex climbed close to 7 per cent. Huge interest in technology and auto stocks propelled the rally. The markets continued their move ahead on Friday with the BSE Sensex rising nearly 4 per cent on firm Asian markets. Investors thronged large-cap stocks trading at low levels after the recent fall.

Among the 30 Sensex stocks, gainers outnumbered losers. 19 scrips ended the week in the green, while 11 slipped in the red despite smart comeback by the index in the last two days. The pack of gainers was led by Bharti Airtel which rose close to 9 per cent, followed by 7.66 per cent rise in Satyam Computers. Bajaj auto ended the week up 6.85 per cent. The prominent losers included HDFC which slipped 13.47 per cent over the week.

The combined daily turnover on both the exchanges dropped by 7.88 per cent to Rs 9,740 crore. Foreign institutional investors injected Rs 301 crore into the equity markets, while domestic mutual funds turned net sellers, pulling out Rs 157 crore over the week.