Markets end higher led by short covering; shrug off rate hike

25 June 2008

It was a smart pull back rally for the markets on strong volumes in last one hour of trade after remained volatile for major part of the day, ahead of F&O expiry day for the month of June. It was mainly because of short covering in the F&O market, which has started in yesterday's trade. It shrugged off completely the effect of RBIs move, which hiked Repo rate and CRR by 50 bps each yesterday. Rally in late trade led by oil, telecom, and select metal, IT and capital goods stocks. Midcap and small cap stocks also bounced back.

Markets had witnessed sharp sell off in opening trade due to RBI's move but managed to show sharp recovery in the first one hour of trade itself and turned into choppy mode since then. The Nifty went below 4100 mark and the Sensex below 14000 in early trade. But due to smart buying support and short covering in F&O, markets jumped up in late trade.

The Sensex has recovered nearly 488 points and the Nifty 159 points from day's low of 13,731.54 and 4093.20, respectively. The Nifty closed at 4252.65, up 61.55 points or 1.47% and the Sensex at 14,220.07, up 113.49 points or 0.8% after hitting an intraday high of 4264.55 and 14,248.65.

Amongst frontliners, Unitech was up 7.87%, Reliance Communication 7.30%, Tata Steel 4.43%, DLF 4.30% and Reliance Infrastructure 4.17% while HDFC lost -4.29%, Wipro -2.91%, Cipla -2.54%, Infosys -2.48% and Power Grid Corp -2.76%.

Metal Index has outperformed other indices, jumped up by 396.32 points or 2.96% to settle at 13,765.14 on the back of buying in JSW Steel, Tata Steel, SAIL, Hindalco, Jindal Steel and Sterlite Ind.

Oil & Gas Index surged by 265.13 points or 2.9% at 9,411.56 as buying has seen in Essar Oil, HPCL, Reliance Ind, Cairn India, BPCL, IOC and ONGC.