Bulls emerge victorious after three days of setback

Frenzied buying coupled with short covering after three straight day's of fall triggered a solid rally in late trade. Reports of Prime Minister's resignation had spooked a sell-off in mid-morning trade. Despite the rally, the market breadth remained negative. The market witnessed choppy swings throughtout the day. Global cues were mixed.

Earlier today, the market saw firm start despite weak global cues, but slipped in red shortly on fresh selling. The market breadth was weak. Shares from oil, realty, declined while those from IT, FMCG and power rallied.

The 30-share BSE Sensex ended up 254.93 points or 1.64% at 15,769.72. Sensex gained 300.01 points at its high of 15814.80 touched during late trade. It lost 200.72 points at day's low of 15,314.02, touched in mid-morning trade.

The BSE Sensex had eroded 900.78 points or 5.48% from 16,415.57 in past three trading days to 15,514.79 on 4 June 2008. Fears of early election, uncertainity over fuel price hike and weak global markets played the spoilsport.

The market breadth was negative on BSE with 1240 shares advancing as compared to 1397 that declined. 77 remained unchanged.

The BSE Mid-Cap index rose 0.05% to 6400.29 and BSE Small-Cap index rose 0.2% to 7,735.5961. Both these indices underperformed the Sensex.

Among the sectoral indices on BSE, the BSE Consumer Durables index (down 1.42% to 4,031.72), BSE Realty index (down 0.99% at 6,326.05), BSE Auto (down 0.08% at 4,222.01), The BSE Oil & Gas index (up 0.02% to 10,061.83), BSE Capital Goods index (down 0.03% at 12,111.63), underperformed Sensex...

Among the 30-member Sensex pack, 22 advanced while the rest slipped.

India's largest wind turbine maker Suzlon Energy soared 8.66% to Rs 268.60. The stock moved up on reports that REpower Systems, in which Suzlon holds 33.6% stake, has bagged an order to supply 100 wind turbines to US-based enXco.

In a crucial development, government yesterday, 4 June 2008 agreed to raise its petrol and diesel prices by about 10% in an attempt to curb mounting losses of state-owned refiners thereby stoking inflation and risking a political backlash. After 10 days of debate over the price increase, the Cabinet also agreed to cut the import duty on crude oil to support state run refining and retailing firms. Customs duty on crude was also reduced to nil from 5%. The duty cuts would amount to Rs 22,660 crore in revenue loss, the Revenue Secretary said.

Analysts opine that higher inflationary expectations immediately gave rise to fears of a cash reserve ratio (CRR) or interest rate hike, which is a negative for markets.

US markets ended mixed in volatile session yesterday, 4 June 2008. Banks fell to their lowest level in eight years on Fed Chairman Ben Bernanke's warning that inflation is still a concern. Financials tumbled on rumors that Moody's May Put bond insurers AMBAC and MBIA on review for a possible credit rating downgrade.