Global rally, short covering lift Nifty above 4600 at close

The Sensex staged spectacular rally today led by positive global cues and jumped over 500 points while the Nifty rallied 150 points during the day. They closed above their important levels of 15,500 and 4,600, respectively. Buying was seen across all the sectors; rate sensitives, infrastructure and commodities' stocks rallied smartly.

The markets started the day on a strong note on the back of positive comments from the Fed at FOMC meet, which pushed the all the global markets higher. Fed said that the economy was leveling out and conditions in financial markets have improved further in recent weeks. FOMC (Federal Open Market Committee) left its target range for the fed funds rate unchanged at 0.00% to 0.25%.

Asian markets ended 0.8-2% higher. At the time of closing of Indian equities, European markets gained around 1% each and US index futures were up over 0.7%.

Roubini, also known as Dr Doom for accurately forecasting the financial crisis beforehand, said the risk of the US economy slipping into a near depression had been eliminated due to the massive fiscal stimulation by the government. ''However, we are already now in the 20th month of this severe recession, the worse we have had since the last 60 years. It's going to be over by December I believe, exactly 24 months as I had said long before.''

Short covering was second catalyst for today's rally because lot of shorts were built up in the markets due to the monsoon worries, which had knocked down the markets a lot in the last few sessions. The shorts were covered today after a gap up opening of 70-80 points. These positive factors helped the 30-share BSE Sensex to rally 498.33 points or 3.32% to close at 15,518.49. The 50-share NSE Nifty surged 147.50 points or 3.31%, to settle at 4605. The Nifty August futures ended with 16 points premium, as per the provisional data.

Not a single stock ended in the red among the largecaps. However, the broader indices outperformed the benchmark indices; the BSE Midcap Index rose 3.6% and the Smallcap up 4.1%. The market breadth was also strong; about 2,260 shares advanced while 564 shares declined on the BSE. Nearly 353 shares remained unchanged.