Nifty ends 110 points higher on short covering, global cues
26 May 2010
The benchmark Nifty has seen huge short covering after yesterday's sharp sell-off, which pushed the index 110 points higher at close while the Sensex by 365 points higher. The Nifty also crossed the 4900 mark.
Recovery in global markets on bargain hunting after yesterday's carnage also helped the markets. All global markets had crashed on Tuesday on European debt worries and rising geopolitical tensions in Korea.
Paul Donovan, Senior Economist of UBS says that contagion is not a serious risk yet. He adds that there are signs of increasing risk aversion.
Being optimistic, he adds that relatively good earnings growth is expected. He explains that a lot of negative news have already been priced in by the equity markets. He adds further that German and North European economies are doing quite well while most of the non-European economies are doing quite well.
European markets were trading 1.5-2% higher and US index futures were up 0.5%, at the time of closing of India equities. Asian markets closed in positive terrain; Jakarta shot up over 7%. Hang Seng, Straits Times, Kospi and Taiwan Weighted gained 1-1.7%. Nikkei was up 0.66% and Shanghai up just 0.12%. The US markets had recovered nearly 3% to end flat on Tuesday.
The 30-share BSE Sensex closed at 16,387.84, up 365.36 points or 2.28% and the 50-share NSE Nifty rose 110.65 points or 2.30% to settle at 4,917.40. The Nifty May futures ended at 8 points discount and June futures at 22 points discount, as per provisional data. Indices saw a bit of volatility at higher levels in an intrade trade ahead of May expiry.
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