Mumbai: The markets snapped the five-day long losing streak with the benchmark Sensex posting a smart 340-point gain even as the crisis-ridden global markets breathed easier after reports of billionaire investor Warren Buffett’s $800-billion offer to US bonds.
Marketmen said Buffett’s offer to reinsure $800 billion of US municipal bond risk from top three bond insurers had a soothing effect on the issue of credit crisis fallout.
The offer eased fears of credit downgrades at US bond insurers and triggered a sharp rally on Wall Street yesterday (12 February), bringing some stability in Asian markets.
However, worries over the health of US economy persisted amid reports that the world’s largest economy would struggle to grow in the first quarter of 2008.
Snapping a five-day long losing streak, the 30-share BSE barometer ended the day at 16,949.14, a gain of 341.13 points, or 2.05%, over its previous close.
The Sensex had lost 2,055.15 points, or 11.01%, in the last five days.
Analysts said the market is expected to move upwards as it recovered immediately after reaching the major break-down levels yesterday and settled above the crucial technical levels.
They further noted that the sure happened despite a negative FII activity. Foreign Institutional Investors (FIIs) pulled out about Rs 498 crore from equity on February 12, as per provisional data.
The market breadth remained extremely negative as the activity was largely confined to frontline stocks.
Mumbai: Buoyed by firm global cues, the BSE benchmark Sensex gained 483 points in late morning trade on Wednesday after billionaire investor Warren Buffett’s offer had soothing impact on world markets.
Buffett offered to reinsure $800 billion of US municipal bond risk from top three bond insurers helping sooth concerns over continued credit crisis fallout.
The offer eased fears of credit downgrades at US bond insurers and triggered a sharp rally on Wall Street on Tuesday as well as a surge in Asian stocks on Wednesday morning.
The 30-share BSE barometer also recovered sharply and was quoted at 17,090.65 at 10.45 a.m, up 482.64 points over previous close of 16,608.01.
Similarly, the National Stock Exchange index, Nifty, shot up by 128.05 points to 4,966.30 at 10.45 a.m. from last close of 4,838.25.
Foreign Institutional Investors (FIIs), however, remained net sellers in the last two days. They pulled out Rs498.06 crore from equity on 12 February, as per provisional data.
The Bombay Stock Exchange benchmark Sensex moved up by 289 points in early trade on Wednesday on emergence of buying by funds in fundamentally strong shares.
The 30-share index, which fell nearly 850 points in the last two trading sessions, bounced back by 288.82 points to 16,896.83 in the first five minutes of trade.
Similarly, the National Stock Exchange index, Nifty, gained 86.10 points to 4,924.35 as heavy-weight stocks like Reliance Industries, Infosys and Tata Steel remained higher.
While the buying by funds in blue chip stocks brought recovery in the market, a firm global trend further fuelled an upward march.