Markets bounce back, sensex up 727 pts

Mumbai: As market regulators worldwide tried to tame the impact of the financial crisis by banning short selling and pumping funds into the system, most markets showed signs of recovery. With leading US indices rallying on Thursday and investors in major Asian markets also stepping in to buy on Friday, the BSE sensex opened with a 450-point gap and continued to gain through the session to close at 14,042, up a whopping 727 points, or 5.5%. The day’s across-the-board rally of the market added about Rs 1.85 lakh crore to investors’ wealth with the BSE’s market capitalization now at Rs 44.75 lakh crore. On Thursday, the US Securities Exchange Commission banned short selling in 799 financial stocks and regulators in other markets also followed suit. Central banks around the world also stepped in and infused money into the system. However, not many believe such steps are good for the long-term health of the market. “It’s more like a desperate move by the regulators,’’ said Amitabh Chakraborty, president (equities), Religare Securities. “Is it a permanent solution? I don’t think so. I believe the steps will help prolong the pain in the market,’’ he felt. And, according to a top dealer at a bank-sponsored brokerage, these governments are behaving irresponsibly by doling out taxpayers’ money to bail out those who had acted intemperately for a number of years. On Friday, the rally was helped by buying in stocks from real estate, IT, oil & gas, power and banking. Among sensex stocks, Satyam ended 10.5% higher at Rs 370, ICICI Bank gained 9.1% at Rs 628, HDFC rallied 8.3% to Rs 2,308 and Tata Power ended 8.3% higher at Rs 1,027. On the Bombay Stock Exchange, the gainers outnumbered the laggards by a margin of about five to two, with 1,888 stocks ending higher compared to 740 that ended in the red.