Short-covering ends losing streak on bourses; Sensex gains 296 points

Written by Markets Bureau | Mumbai, Jun 11 | Updated: Jun 13 2008, 05:09am hrs
After hitting a new low level for the year 2008 in the previous trading session, key equity indices made a smart recovery on Wednesday, surging by around 2%. The 30-share Sensex of the Bombay Stock Exchange (BSE) closed above the 15k mark at 15,185.32 points, posting a gain of 296.07 points or 1.99%. While the broader S&P: CNX Nifty of the National Stock Exchange (NSE) breached an important technical level of 4.5k to end the day at 4,523.60 points, a gain of 73.80 points or 1.66%.

Experts attribute the bounce back to heavy short covering of the short positions by investors, which had built a huge short position especially after the expiry of May F&O contracts. However, the overall sentiment still remains bearish and it is unlikely that the rally may sustain, they added.

However, on more optimistic note, Paras Adenwala, CIO, ING Investment Management said, Once the global commodities prices cool off, the markets across the globe are going to bounce back and so are the Indian markets. With a GDP growth of more than 7.5%, Indian markets would definitely look compelling and we might see foreign flows hitting Indian markets.

Also, the most beaten realty stocks sought investors attention, with the BSE Realty Index surging the most amongst the other sectoral indices by 173.05 points or 3.07% to close at 5,803.66 points. Stocks in the realty segment like Omaxe surged by Rs11.70 or 6.97% to end the day at Rs179.65, followed by Akruti City, which gained by Rs55.25 or 6.93% to close the day at Rs 852.55. Even stock of DLF rose by Rs 31.35 or 6.53% to end the day at Rs 511.20, however, still trading below the issue price of Rs 525.

Foreign institutional investors (FIIs) continued their selling streak on Wednesday and according to the provisional figures from the stock exchanges, they were net sellers at Rs 217.27 crore, while domestic institutional investors (DIIs) were net buyers at Rs 546.47 crore.