Late short covering keeps mkts in green

Mumbai: Benchmark Sensex and Nifty closed higher for a third session in a row on Wednesday as fag-end buying in banking, financial and oil stocks helped the indices rebound from early lows amid a bearish trend in global equity markets.

Covering-up of short positions by bears supported a late recovery in stocks and helped wipe off losses, traders said. However, a weak rupee against major rivals overseas weighed on market sentiment and restricted gains, they added. In a largely subdued session, the 30-share BSE Sensex ended 123.63 points or 0.21 per cent higher at 60,348.09 as 17 of its constituents gained and 13 declined.

The barometer opened lower and stayed negative for most part of the trading session due to losses in Asian markets. Fag-end buying in select index heavyweights helped the index to pare all the losses and settle in the green. During the session, the index touched a high of 60,402.85. The broader NSE Nifty settled higher by 42.95 points or 0.24 per cent at 17,754.40. Nifty made a negative start and fell by more than 100 points during the day to a low of 17,602.25.

"Domestic equities opened gap down in line with global markets post the hawkish commentary from US Fed Chair Jerome Powell. But value buying at lower levels led the markets to reverse their losses and close in green," said Siddhartha Khemka, head (retail research), at Motilal Oswal Financial Services Ltd.

"The Indian equities despite negative global sentiment witnessed a sharp rebound from the lower end. The Nifty index remains in a buy mode as long as it holds the support of 17,500 on the downside where fresh put writing has been observed, said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.

"The global market has fallen back into the grip of uncertainty as the Fed chief signalled the possibility of a prolonged and faster rate hike, contradicting a Dovish comment made by another Fed official last week. The market now anticipates a 50 bps rate hike, which has pushed the dollar index to a three-month high. However, a strong recovery was seen in the domestic market towards the end of the day, which kept the bulls on the move," according to Vinod Nair, head (research) at Geojit Financial Services.