Sensex opened on a bearish note at 3805.44 and touched the day's high of 3840.27 following huge short covering and squaring up of positions by major players on account of last day of current settlement. But later Sensex nosedived to touch the day's low of 3675.53 showing an intra-day loss of 165 points following reports that India lost one helicopter engaged in Kargil operations. Sensex finally ended at 3773.32 showing a net loss of 88.92 points from the previous close of 3862.45 points. The BSE-100 index lost by 41.23 points to 1636.97 as against the previous close of 1678.20.

Brokers said the partial recovery at the end was mainly due to short covering and the Defence Minister's positive statement duringthe day. This encouraged marketmen to go for fresh positions with the Sensex too showing recovery on good buying support by foreign investors and domestic financial institutions led by UTI. With the last day of the current settlement, operators preferred to lighten their commitments right from resumption of trading as they expected escalation in the situation on border which would determine the market trend next week.

``The uncertainties will continue to prevail for some time. However, this correction has provided ample opportunities for long term investors to rebuild their portfolios. The portfolios should however be built in a selective manner,'' said a fund manager. Foreign institutional investors who invested heavily after the fall of the Vajpayee government have slowed down their operations. FIIs have adopted a wait-and-watch approach.

Said the senior official of a mutual fund, "At present the situation is uncertain. FIIs would take a view to stop investing into the market or even withdraw theirinvestments. Most funds are at present fully invested and had made good purchases in the previous rally. It would make sense to buy only at lower levels now. Also the funds are not sitting on surplus cash and the liquidity with the funds is low and the strategy would be to buy if the market falls further".

BPL, Ashok Leyland, Reliance, ITC, Telco, Reckit & Colman, BHEL, Britannia, Concor, Hero Honda and C Enka emerged as gainers even in the bearish phase, dealers said and added that most of the prime counters witnessed major losses. The total turnover on the BSE BOLT system reported during the day was Rs 1747.35 crore. Satyam computer registered highest turnover at Rs 195.99 crore, SBI Rs 185.13 crore, Pentafour Software Rs 169.79 crore, ITC Rs 149.18 crore and Reliance Rs 127.96 crore.

Rupee closes higher against dollar

MUMBAI: The rupee which plunged on Thursday managed to bounce back on Friday. The Indian currency went down to an intra-day low of 43.09/10 against the dollar on Friday, butrecovered smartly to close at 42.93/94. Opening the day at 43.05/06, almost unchanged from its last close, the rupee went down to the 43.09/10 level as a few banks bid the dollar anticipating corporate interest. "The rupee movement was largely on account of banks buying dollars. Corporate interest for dollars was, however, poor. The rupee recovered on unwinding of long-dollar positions by corporates," said Mecklai Financial Services' senior vice-president KN Dey.