Profit-booking props pivotals to new peaks
The stock market made a smart recovery on Wednesday retrieving most of its losses from the previous four trading sessions.
Bargain hunting after a four-day decline helped domestic equities log smart gains in what was a global rally. Reviewing the current scenario in the emerging markets, Goldman Sachs Asset Management Chairman Jim O’Neill stated that BRIC nations are no longer emerging markets as they have become growth markets for world economy.
While the rally in India was entirely due to inflows from foreign institutional investors, with the bellwether index of BSE staging a significant recovery with a 434 points in the day’s trading session. All 13-sectoral indices on the BSE logged gains. Capital Goods, Auto, Bankex, FMCG and IT which gained 2 per cent each were the top sectoral gainers. On the other hand, Health Care and Metal remained laggards through the day.
Covering short
Analysts maintain that the steady upmove through the day was due to traders covering shorts and additional buying seen from FIIs as they were churning their portfolio. Though BSE Sensex opened in the red, it quickly rebounded and headed northwards on the back of buying mainly in auto, banking and capital goods.
BSE 30-share Sensex was up 434.32 points or 2.25 per cent to close at 19,696.86 points, its highest closing level since April 4, 2011. The 50-unit S&P CNX Nifty was up 125.80 points or 2.17 per cent to settle at 5,911.15, which is its highest closing since January 6, 2011. The Nifty hit high of 5,923.60 and low of 5,735.55, during the day.
The market breadth, indicating the health of the market, was strong. On BSE, 1,941 shares advanced while 977 shares declined. A total of 93 shares remained unchanged.
