The short covering and the money flow shifting from commodity to equity market was responsible for across the board huge rally in the equity market on Tuesday. A majority of the sectoral indices including Bombay Stock Exchange (BSE) realty, bankex, consumer durable, IT and power, which were battered heavily in the recent carnage at the bourses shined on Tuesday and outperformed the benchmark Sensex.
The realty stocks index BSE Realty has led the sectoral pack which went up by 9.48% or 645 points (pts) at 7,451 pts. The Bankex gained the second highest as it went up by 8.1% or 626 pts at 8,371 pts.
Jignesh Desai, head, institutional sales, SBI Securities said that two factors were mainly responsible for the rally in the across the board buying. One, the investors opted for short covering ahead of the expiry of the March derivative contracts on Thursday . And, the second is the shifting of the money from commodities to the equity market. The investors have booked profit in commodities market in the last two days which was invested in the equities, he said.
All three ADAG stocks –Reliance Capital Ltd (RCap), Reliance Energy Ltd (REL) and Reliance Communications Ltd (RCom) — were top gainers in their respective sectors. RCap gained the most (18%) to close at Rs 1,328.75 compared with previous close of Rs 1,129.15. The next best performer in the sector was Kotak Bank, which gained 13% to close at Rs 627.80. The REL stock was up by 13% at Rs 1,300.15, while the second best was Tata Power which gained 6% to close at Rs 1,168.10. R Com moved up by 6% at Rs 538.20, while its arch-rival Bharti Airtel gained 4% to close at Rs 834.35.
Among other sectoral indices, BSE CD went up by 8.02% or 279 pts at 3,772 pts and IT index rallied by 7.73% or 264 pts to end at 3,686 pts.
