Mumbai: Overcoming a brief resistance during mid-session, the market today (Oct 26, 2004) bounced back and ended up by 70 points on fairly heavy buying support from operators and retailers even as the Central bank kept interest rates untouched at six per cent while raising the Repo rate.

The BSE Benchmark 30-share Index had fallen back to the intra-day low of 5558.14 during the mid-session after initial smart rally, but later made a strong turnaround and ended at 5651.09 as against yesterday's close of 5581.49, a net gain of 69.60 points or 1.25 per cent.

Discounting the Reserve Bank of India's (RBI) projections of lower growth and higher inflation for this fiscal, market players resorted to short covering after the apex bank kept the bank rate untouched at six per cent contrary to market fears of a hike in the interest rate. RBI scaled down economic growth projections to 6-6.5 per cent from 6.5-7 per cent and sharply raised inflation estimates to 6.5 per cent for the current fiscal. It also raised the Repo rate by 0.25 per cent to 4.75 per cent to tame inflation in its busy season Credit and Monetary Policy.

The fall in oil prices to below $ 55 per barrel during the trading session also provided a respite to the market.

Enthused by continued flow of encouraging quarterly results, Operators covered their short positions ahead of the expiry of October contract in the Futures and Options on Thursday (Oct 21, 2004), brokers said.

Foreign Institutional Investors, which reported net sales of Rs 184 crore on October 20 and 21, were believed to be buyers in select blue chip counters.