Sensex recovers from lows, but still down by 228 pts.

After heading towards what appeared a brutal fall, the stock markets trimmed losses to 228 points on softening inflation numbers and signs of recovery in European markets. The key benchmark index, which opened 790 points down, made a sharp rebound in mid-afternoon trade as European markets came off lows and US index futures indicated a higher opening on Wall Street. The 30-share BSE Sensex ended at 10,581.49 as against the Wednesday's closing level of 10,809.12, a loss of 227.63 points or 2.11 per cent. The 50-share Nifty of National Stock Exchange also fell by 69.10 points or 2.07 per cent to close at 3,269.30.

Asian indices took a beating on poor US data that showed retail spending declined to 1.2 per cent in September in further evidence of slowing economic activity that may push the world's largest economy into a recession. European markets fell as much as 5.60 per cent on opening but came off lows to trade between 3.14 per cent to 3.91 per cent.

Sensex-related Sterlite Industries, Reliance Communication, HDFC, Bharti Airtel and Tata Steel recovered sharply from their lows. Softening of inflation at 11.44 per cent triggered recovery in bank stocks from an initial slump as lower inflation may trigger cut in key rates by the Reserve Bank Of India, which may spur lending. Asian markets declined sharply today on global recession concerns. Asian indices were trading down by about 3.11 per cent to 9.55 per cent. Despite a slew of measures to inject liquidity in the markets, brokers said investors turned cautious on fears that slowing economies would affect Q2 corporate earnings.