Monday, February 6 2006 11:38 Hrs (IST) - World Time -

Mumbai: Discounting reports that the rising cost of production has pulled down the profit growth rate of corporates, the Bombay Stock Exchange Benchmark 30-share Index (sensex) today recovered smartly and was quoted 54 points up during morning trade on emergence buying support.

The market seemed to have discounted reports that the profit growth rate of majority companies was down a 14-quarter low of 3.57 per cent in the quarter ended December 2005 even as it responded positively to the likely reduction in freight rates by 20 per cent in the forthcoming Railway Budget.

After the three-day slide, the sensex resumed better at 9,746.09 against Friday's close of 9,742.58 and later spurted to a high of 9,822.59 before being quoted at 9,797.04 at 10.30 am, up by 54.46 points over previous close.

Brokers said operators and some institutional investors were seen making fresh commitments in select blue chip stocks.

Reports that the Railway Budget 2006-07 is likely to reduce freight rates by 20 per cent to take on competition from road transport following a Rs 11,000 crore surplus income seemed to be the trigger for market rally, they added.

However, withdrawals made by some Foreign Institutional Investors (FIIs) remained a cause of concern for domestic investors.