Blue chip stocks bounced back yesterday after falling for the previous two sessions, buoyed by bargain hunting and an easing of the bond market.

About 386 million shares changed hands, with 1,423 higher, 898 lower and 793 unchanged.

In the bond market, the average yield on the Treasury Department's benchmark 30 day bonds was at 7.0 per cent against 7.01 per cent late on Monday. It had slipped to 6.97 per cent during the session amid short covering in advance of Friday's publication of the May employment figures.

Traders did not act on indicators that showed April industrial orders slipped 0.1 per cent, against the 1.0 per cent drop that had been anticipated.

Capital holders went bargain hunting on Wall Street, encouraged by the drop, albeit temporary, in long term interest rates below the psychological 7.0 per cent mark.