Business Financials

Indian equities surge on short covering

Indian equities surge on short covering

Mumbai: Short covering and value buying lifted the Indian equity markets during the mid-afternoon trade session on Tuesday.

The key indices traded with substantial gains, as healthy buying was witnessed in consumer durables, healthcare and automobile stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) surged by 60.45 points or 0.76 per cent to 7,968.70 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 25,815.43 points, traded at 26,014.44 points (at 2.00 p.m.) — up 207.34 points or 0.80 per cent from the previous day’s close at 25,807.10 points.

The Sensex has touched a high of 26,029.02 points and a low of 25,803.19 points during intra-day trade so far.

The BSE market breadth was tilted in favour of the bulls — with 903 advances and 1,488 declines.

“After yesterday’s huge falls, the equity markets witnessed a corrective rally in today’s trade and traded in the green,” Astha Jain, Senior Research Analyst at Hem Securities, told IANS.

“However, the markets are still on the weaker side as we are expecting further falls in the near term. The dollar has appreciated in today’s trade.”

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the CNX Nifty traded with firm sentiments due to short covering.

“Pharma, oil-gas, textile, aviation and media-entertainment stocks traed with firm sentiments, while auto, FMCG, cement and power stocks traded with sideways to firm sentiments due to buying support,” Desai said.

“USD/INR futures traded with firm sentiments which may restrict the upside on Indian equity markets in the intraday session.”

On Monday, both the Sensex and the Nifty had plunged as a major announcement by the Prime Minister, coupled with continuous outflow of foreign funds and selling pressure, spooked investors.

The barometer index was down by 233.60 points or 0.90 per cent, while the NSE Nifty edged down by 77.50 points or 0.97 per cent.