Share prices spurted on the Bombay Stock Exchange (BSE) at mid-session on reports that the Indian National Lok Dal (INLD) has decided to support the BJP-led government. As a result, almost all A group shares came under the circuit breaker limit and trading was stopped. Sensex suddenly changed the course and shot up by 6.43 per cent or more than 215 points as soon as the INLD announced its unconditional support to the Vajpayee government.

Marketmen feel that the day's development on the political front will ensure the smooth passage of the Finance Bill which was uncertain due to theno-confidence motion in the Lok Sabha. Speculators, foreign funds and even Indian institutions and mutual funds joined the bull band-wagon and lent support to the market which was in an oversold position.

Sensex opened steady at 3,353.61 points as operators covered their short positions in the morning as it was the last day of the current settlement on the BSE. For the better part of the day, Sensex moved in a narrow range and touched a low of 3,348.60. However, shortly after mid-session as reports of Chautala giving unconditional support to the BJP government poured in, Sensex bounced back. Sensex touched a high of 3,384.62 towards the close before settling at 3,572.91, gaining 215.79 points.

On the National Stock Exchange, the S&P CNX Nifty index opened at 970.95, slipped to the low of 965.15 and touched the high of 1044.85 before closing at 1044.45 against 968.60 points of the previous day, gaining 75.85 points (7.83 per cent) which is the second highest gain since its inception. The highest gainrecorded was 104.30 points (10.44 per cent) on March 1, 1997.

Market leaders like Reliance Industries, SBI and ITC hit the upper limit of circuit breaker (at Rs 126.40, Rs 172.60 and Rs 970.25 respectively). Software stocks also bounced back smartly. Pharmaceutical stocks bounced back after the initial weakness.

Moreover, the sentiment got further boost on heavy purchases from foreign funds as well as Indian financial institutions (FIs) prompted by strong hopes of political stability at the centre. Marketmen are now hoping that the BJP-led government will sail through the motion of confidence in the Parliament on Saturday. Markets are also hopeful that the important bills like the Finance Bill, pharma bill and the Insurance Regulatory Authority Bill will be cleared by the Parliament.

Said a broker, ``The markets want a stable government. The assured support by INLD and DMK almost confirmed the survival of the Vajpayee government.''

With Friday's gain, the Sensex has now recovered the losses in thelast ten days. Sensex had crashed by 167 points on the day AIADMK announced the withdrawal of its ministers from the Central ministry.