Business

Sensex surges on short covering

Banking, financials continue to shimmer

Indian equity benchmarks rose for the second straight session on Thursday with the benchmark Sensex closing above the 32,000-mark as banking and financials continued to witness buying interest.

The 30-share Sensex gained 595.37 points, or 1.88% to close at 32,200.59. The index had last closed above the 32,000-mark on May 13.

The broader Nifty settled the day at 9,490.10, up 175.15 points or 1.88%. The India VIX index, looked upon as a barometer of near-term volatility, dropped a little over 4% on Thursday.

Market participants attributed the rally to short covering — Thursday was the expiry of derivative contracts — and a positive trend in most of the Asian markets.

Global cues chip in

“Initially, firm global cues triggered the momentum which further strengthened due to short covering in index majors, mainly from the banking and financial space,” said Ajit Mishra, vice-president, research, Religare Broking.

“Importantly, Nifty has managed to surpass its immediate and crucial hurdle at 9,450.

“So, it may be heading towards the 9,650-9,750 levels. And, we feel banking and financials will continue to play a critical role,” added Mr. Mishra.

Banking and financial majors such as IndusInd Bank, HDFC Bank, HDFC and ICICI Bank were among the top gainers in the Sensex pack, supported by auto majors such as Maruti Suzuki India and Hero MotoCorp.

The overall market breadth was also strong with more than 1,500 stocks that gained as against 816 that declined.

FPIs net buyers

Foreign portfolio investors were significant buyers on Thursday with net buying worth ₹2,354 crore.

Domestic institutions were also net buyers albeit at a much smaller level of ₹145 crore.

Among the Asian markets, the benchmarks of Japan, Indonesia, China, Australia, Malaysia and Philippines all gained on Thursday.

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Printable version | Jul 15, 2020 2:41:55 PM | https://www.thehindu.com/business/sensex-surges-on-short-covering/article31697919.ece

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