The market has been in recovery mode on Thursday despite the uncertainty after war commenced in West Asia.
But the market is reckoning that the war will be brief and non-cataclysmic. Asian markets have also been plodding higher on that contention. Domestic bourses are rising for the second straight day today. However, uncertainty still looms over the duration of the war and could be the trigger of volatility in the next few sessions.
The 30-share Bombay Stock Exchange Sensex was up 39.50 points to 3,160.72 in the first one-and-a-half hours of trading. The S&P CNX Nifty was up 13 points to 1,016.95.
A host of pivotals, banking, auto and IT, edged higher. Top gainers included Bhel (up 3.4% to Rs 215), Satyam Computer (up 3.2% to Rs 200.75), Ranbaxy Laboratories (up 3.2% to Rs 602.50), HCL Technologies (up 2.6% to Rs 157.75) and Tisco (up 2.4% to Rs 139).
Among the prominent gainers among non-Sensex stocks were Polaris Software (up 5.5% to Rs 127), Jindal Iron & Steel (up 5.2% to Rs 82.65), Canara Bank (up 4.6% to Rs 66.10), Titan Industries (up 4% to Rs 54.50), ABB (up 3.6% to Rs 299) and Apollo Tyres (up 3.2% to Rs 118.95).
The Sensex surged 36.27 points to 3,121.18 on Wednesday, taking cue from the surge in US markets Monday-Tuesday. Local bourses were closed on Tuesday on account of the Holi festival and, therefore, the impact of that rally was felt on Wednesday. On Monday, the market staged a smart recovery from the lower levels. It settled with a loss of 23.33 points at 3,084.91 after plunging 59.19 points to the day's low of 3,049.05.
Dealers say short covering is aiding the rally on local bourses amid expectations that the war would be short and swift and could last for, at the most, 1 month. Global markets have staged a recovery over the last few trading sessions on expectations of a short and swift war but analysts say the `overhang' of the fair amount of outstanding long positions in the futures markets could weigh down local markets and restrict gains. Heavy short- covering is said to have aided recovery in the last few trading sessions.
Asian stocks initially retreated from early gains after the US ordered strikes against Iraq in the wee hours Iraqi time on Thursday but all major markets recovered by afternoon after digesting news that the long-anticipated war had begun. The Nikkei 225 average in Japan was up 144 points or 1.7% to 8,195. It still was off the day's high. Hong Kong's Hang Seng index was up 67.20 points or 0.7% to 9,225.80, the All Ordinaries index in Australia was up 21.10 points or 0.75% to 2,835.80, the Straits Times index in Singapore was up 28.60 points or 2.2% to 1,313, South Korea's KOSPI was up 26.40 points or 4.8% to 568 and the Weighted Index in Taiwan was up 84.20 points or 1.8% to 4,599.20.
Part of those gains were aided by a sharp setback in global crude oil prices. Oil futures fell 6% after US and British forces began a bombing campaign in Iraq to overthrow president Saddam Hussein. US crude oil for April delivery had dropped $1.55 cents to $28.33 in electronic trading. In the last five days, a massive 21% has been eroded from oil prices ahead of the expiry of the deadline for Iraqi president Saddam Hussein to flee Iraq. Though oil prices have come off the highs, with the beginning of war, worries persist about the disruption of oil supplies and oil shortages if Iraq embarks on setting oil wells afire.
Meanwhile, US president Goerge Bush warned that the conflict could take longer than expected and could prove more difficult than was predicted. Bush said he would apply the full might of the US military to achieve a swift victory.
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