There was finally some reprieve for the beleaguered markets.
After being battered by around 575 points in the past three trading sessions alone and sliding by nearly 200 points post the disappointing IIP numbers during the course of the day, the Sensex managed to reverse its loss-making streak in the later half of the day on the back of a robust short-covering rally in the index heavyweights from the banking and auto space.
The BSE-benchmark registered gains of 265 points or 1.5% at 17,728 and the Nifty added 84 points at 5310.
And the broader markets jumped nearly 3%; the midcap index ended at 6475, higher by 183 points and the smallcap index shut shop at 7808, up 223 points.
The benchmark indices had begun on a tentative note following their recent decline and the slowdown in industrial production in December, as reflected in the IIP numbers, only dragged the indices further south in a knee-jerk reaction of sorts.
But a recovery in the equally hammered Hong Kong bourses and a possibly belated realisation that the IIP numbers were already factored into the ongoing corrective phase, led to an intra-day reversal just when the chips seemed down. Only time would tell how far the pullback rally would go.
The IIP data for the month of December came in at 1.6% compared to 2.7% in November.
The manufacturing sector growth stood at 1% compared to 19.6% during the previous year, electricity sector grew by 6% versus 5.4% and the capital goods sector growth came in at 13.7% versus 42.9%. There were re-assuring voices from the government side though.
Sticking to its projection of over 8.5% GDP growth this fiscal, the Planning Commission Planning Commission Deputy Chairman Montek Singh Ahluwalia said that the monthly variations in industrial output numbers should not be a cause of concern.
And while expressing disappointment at the low industrial output growth in December, the finance minister Pranab Mukherjee said the monthly numbers do not reflect correct picture of the economy.
On the global front, the US stocks closed flat Thursday on investor caution after embattled Egyptian President Hosni Mubarak refused to step down.
The Dow was down 10 points at 12,229, while the Nasdaq was up one point at 2,790. In Asia, Hong Kong's Heng Seng index ended higher by 0.48% and China's Shanghai Composite rose 0.34%.
However, the key benchmark indices in Japan, Indonesia, Singapore, South Korea and Taiwan fell upto 2.5% each.
The European markets had also edged lower in mid-day trades due to the
Egyptian blues.
The banking sector raced ahead by more than 1% to emerge as the leading sectoral gainer on the BSE.
In the financials space, ICICI Bank gained 4.1% at Rs 1001, HDFC jumped by 3.8% at Rs 620, SBI strengthened by 3.5% at RS 2584 and HDFC Bank added 2% at Rs 2060.
The auto space saw the likes of Tata Motors gaining 3.7% at Rs 1144, Bajaj Auto strengthening by 3.5% at Rs 1255 and Maruti adding 2.1% at Rs 1184.
The result expectations ahead of the third quarter numbers announcement scheduled later in the day also drove the rally on the Tata Motors' counter.
Announcing its results at the fag end of the trading session, Tata Motors posted a 272.92% jump in Q3 consolidated net profit at Rs 2,424 crore versus Rs 650 crore and its consolidated net sales leaped from Rs 26,043 crore to Rs 31,510 crore.
The ADAG stocks bounced back after the Reliance ADA Group said it had identified stock brokers sending "baseless sensational charges" against the group through emails, text messages and voice calls. Reliance Communications, which had touched a historical low of Rs 91 in the early part of this session, recouped all the losses and actually added 0.6% at Rs 97.
Moreover, Reliance Infra extended its previous day's gains to add another 5.2% at Rs 615 ahead of its board meeting scheduled on February 14 to mull buyback of equity shares.
It may be recollected that the ADAG stocks were hammered during Wednesday's session on the back of rumours that the CBI could question or even arrest senior officials of the group in connection with the 2G scam.
The realty stocks also came back into the reckoning after their recent drubbing. DB Realty soared by 10.3% at Rs 139, Sobha Developers jumped by 12.9% at Rs 224 and HDIL zoomed by 8.2% at Rs 137.
Gitanjali Gems was the top gainer among the mid-cap stocks, followed by JM Financials, Sobha Developers, Shoppers Stop and Nagarjuna Construction Company.
Everonn Education was the leading gainer in the small-cap space, followed by Quadrant Televentures, Ashiana Housing, Shirpur Gold and Confidence Petro.
On the other hand, Tata Power weakened by 2.6% at Rs 1183 to top the losers list on the BSE.
And the metal space languished throughout the day; Hindalco shed 2.2% at Rs 211 and Tata Steel lost 0.7% at Rs 595.
The market breadth turned strong at close. Out of 2949 stocks traded on the BSE, there were 2073 advancing stocks as against 761 declines.
There was finally some reprieve for the beleaguered markets.
