Short covering in F&O help bourses recoup early losses

Written by Markets Bureau | Mumbai, May 12 | Updated: May 13 2008, 06:29am hrs
Fall in the Index of Industrial Production (IIP) numbers, which stood at around 3% for the month of March as against 8.6% for the previous month of February led the key equity indices to remain volatile before finally managing to recoup all its early losses in the last half an hour of the trading session. The short covering at the fag end of the session in the derivatives segment helped the cash market to bounce back from the red to end in green.

The benchmark Sensex of the Bombay Stock Exchange (BSE) after losing more than 300 intra day points closed with a gain of 123.83 points or 0.74% at 16,860.90 points while the broader S&P CNX Nifty of the National Stock Exchange (NSE) closed at 5,012.65 points posting a gain of 30.05 points or 0.60%.

On the derivatives segment of the NSE, a jump in the trading volumes was witnessed with trading volumes standing at 78.15 crore shares as against 69.46 crore shares on the previous trading session. Some short covering at the fag end of the session helped Nifty futures for the May month to end the day with a premium of 14 points at 5,024 points. The Open Interest (OI) for the Nifty future's May contract shed 4.8 lakh shares or 1.50% to 3.1 crore shares. Amitabh Chakraborty, president-Equity, Religare said, "Markets have factored almost all the negative news. At stock specific level, anticipation of the bad news has forced the investors to pull them out of the market even before the event and same thing happened when we witnessed poor IIP numbers and bad inflation data."