Financial institutions led by the Life Insurance Corporation of India supported the market on Monday after it commenced trading for the second time at 1.16 pm.
S B Mathur, chairman of LIC, said, "We remained a net buyer in the stock market on Monday. This was a good buy opportunity with prices of almost all scrips attaining levels that would help us book profits in the future. We would continue buying as long as we find it prudent."
"We supported the market and have bought stocks worth well over a few hundred crore," said LIC managing director R K Vashishtha.
General Insurance Corporation of India however remained aloof from the market. "We refrained from major dealings in the stock market with volatility being very high," explained P B Ramanujam, managing director, GIC.
"We would not like to take a position in this situation when the political situation is uncertain," he added.
FIs actively started buying after the exchanges opened up for trading for the third time during the day.
Domestic funds stepped into buy, with some amount of short-covering also having a positive effect.
However, not all the institutions immediately jump into the fray when trading re-started in the afternoon.
"The situation is very volatile looking at the complete meltdown. We are watching the situation carefully and will not jump in at this moment," said a senior banker just after trading recommenced.
Ever since the exit of the earlier avatar of the Unit Trust of India from the market, the state life insurer has been active in propping up the market whenever required.
"It is our own strategy as we are (market) players and need to ensure the health of the market," said Vashishtha, refuting claims that the government had asked institutions to prop up the market.
Just a day after the BJP government lost power in Andhra Pradesh -- which gave a strong hint of the outcome at the elections at the Centre -- LIC picked up stocks worth Rs 300-400 crore (Rs 3-4 billion). LIC has been buying a mixed bag of stocks.
Domestic institutions took the cue from statements made by BJP leaders Arun Jaitley and Jaswant Singh.
"This type of intervention by the caretaker government has been important in improving market sentiment," said a senior institutional official.
