Stocks rebound on crude's support

Stocks opened higher Wednesday as investors cheered crude oil's fall below $139 a barrel offsetting weak global cues after Federal Reserve Chairman Ben Bernanke spelled out serious economic risks facing the United States. Experts feel that sentiment will change for the better given that the market is in an oversold condition. Consumer durables and capital goods led the upmove while auto and FMCG stocks edged lower.

"With our Volatility Index showing a reading of 49.5 per cent, it may be time for the volatility to cool. IT stocks should provide the much needed lead. Autos could also join the bandwagon. But I guess, it should reflect some change in the sentiment. Technically, a new low has been made. But the sentiment could be better today, though we are not yet putting the bears to sleep," said Anagram Stock Broking.

At 10:08 am, Bombay Stock Exchange's Sensex was at 12,762.80, up 0.68 per cent or 87 points from Tuesday's close. National Stock Exchange's Nifty rose 1.03 per cent or 40 points to 3900.75.

Biggest Sensex gainers were Ranbaxy Laboratories (up 6.07%), Jaiprakash Assoociates (2.75%), Satyam Computer (2.21%), Hindalco Industries (2.1%) and HDFC Bank (2.02%).

Mahindra & Mahindra (down 1.01%), ITC (1.1%), Hindustan Unilever (0.31%), Ambuja Cement (0.2%) and ONGC (0.02%) were the only losers on the 30-share index.

Market breadth on BSE showed 344 shares rose and 166 fell on BSE.

US crude oil futures ended more than 4 per cent lower on Tuesday. On the New York Mercantile Exchange, August crude settled down $6.44, or 4.44 percent, at $138.74 a barrel, trading between $135.92 and $146.73.

US stocks tumbled overnight after Fed Chairman Ben Bernanke said that the likelihood is high that the US economy would slow further and the outlook for inflation had also intensified, providing little comfort for investors and consumers struggling in stagflationary conditions.

It was the first time the Dow Industrial Average closed below 11,000 since July 2006, down 93.39 points, or 0.84 per cent, at 10,961.80. The Standard & Poor's 500 Index was down 13.34 points, or 1.09 percent, at 1,214.96 while the Nasdaq Composite Index managed modest gains and ended 2.84 points, or 0.13 per cent higher at 2,215.71.

Asian stocks declined for a third straight day mirroring Wall Street losses. The Nikkei slumped 0.58 per cent, Hang Seng shed 0.31 per cent and Straits Times fell 0.13 per cent.