Short-covering swells markets, Sensex up 243 points

Positive European markets, coupled with short-covering and attractive prices, buoyed the Indian equity markets during the late-afternoon trade session on Wednesday.

This led to a barometer index of the Indian equity markets to gain 243 points.

The upward movement came after the index touched a new 52-week low during the intra-day trade.

Initially, both the bellwether indices of the Indian equity markets made gains due to value buying at lower levels that was prompted by attractive prices.

However, both indices soon ceded their gains due to disappointing macro-economic data points on the country's factory output and retail inflation that were released after market hours on Tuesday.

Besides, anxiety was stoked by the third quarter (Q3) results season that started on Tuesday.

Long-liquidation positions and sliding Chinese markets, too, dented investors' sentiments.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) was higher by 243 points, or 1 percent.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading in the green. It was up 70.55 points or 0.94 percent at 7,580.85 points.

The 30-scrip Sensitive Index, Sensex, of the S&P Bombay Stock Exchange (BSE), which opened at 24,804.64 points, was trading at 24,925.24 points (at 2.45 p.m.), up 243.21 points or 0.99 percent from the previous day's close at 24,682.03 points.

During the intra-day trade so far, the Sensex touched a high of 24,952 points and a low of 24,387.69 points -- its new low in 52 weeks.

In contrast, the S&P BSE market breadth still favoured the bears -- with 2,230 declines and 528 advances.

"Positive global markets, except those of China, have prompted some short-covering that led to the upswing," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

"We have had a positive opening based on yesterday's close. However, the general weakness still persists and led to a sharp decline during the intra-day trade."

Nitasha Shankar, vice president for research with YES Securities, elaborated that the
Indian markets witnessed a sudden drop giving away their entire morning gains.

"Maximum pain is visible in the broader market as stocks tumble. Market breadth is skewed in favour of the bears," Shankar noted.

"PSU banks, reality and metal indices continue to bleed."