Sensex recovers early losses, still ends down 29 pts

Easing foreign direct investment (FDI) norms as well as good buying support in key counters at the day's lower levels helped the benchmark Bombay Stock Exchange Sensex to recover a major part of its initial losses, but the index still ended lower by 29 points, snapping three consecutive sessions of rise.

The market resumed sharply lower on doubts over the effectiveness of the US government's latest rescue plan to stimulate the sagging economy, pushing the Dow Jones Industrial Average and the Nasdaq Composite Index down by a whopping 4.62% and 4.20%, respectively, last night.

But news that the government today changed the FDI policy and excluded indirect investment through domestic companies from overall sectoral ceilings, giving scope to foreign firms to increase equity in their Indian joint ventures, gave a much-needed boost to the Sensex to recover from the day's low level.

The 30-share Sensex resumed sharply lower at 9,462.14 as against yesterday's close of 9,647.47, but it recovered a major part of its early losses to settle the day at 9,618.54, a fall of 28.93 points or 0.30%.

The index had gained 556.59 points or 6.12% in the last three trading sessions.

The broader 50-share Nifty of the National Stock Exchange also declined by 8.80 points or 0.30% to 2,925.70 from the last close.

Some pharma and metal counters led the fall while good buying support in key frontline counters cushioned the Sensex's decline.

Expectations of tax sops in the forthcoming interim general budget, to be announced on February 16, also helped the market recovery.

Foreign institutional investors (FIIs) picked up shares worth Rs368.96 crore on February 10, as per provisional data.

Among Sensex-based counters, Ranbaxy Lab dropped 5%, Grasim Industries 4.07%, Reliance Infrastructure 3.73%, Tata Steel 3.38%, Tata Motors 2.09%, Sun Pharma 1.94% and TCS 1.90%.

But Maruti Suzuki firmed up 4%, ACC 2.64%, Jaiprakash Associates 2.47%, Tata Power 1.81% and Bharti Airtel 1.72%.

The market breadth was slightly positive as 1,263 shares ended with gains and 1,138 with losses on the BSE. Trading volume dropped to Rs3,280.70 crore from Rs3,726.86 crore on Tuesday. Educomp Sol was the most active stock with the highest turnover of Rs227.52 crore followed by Reliance Industries Limited (Rs190.47 crore), Reliance Capital (Rs180.66 crore), Reliance Infra (Rs167.24 crore) and United Spirits (Rs145.02 crore).

The BSE 100 index also moved down by 11 points or 0.22% to 4,878.29 from the last close of 4,889.29.