Sensex skyrockets…Nifty ends above 5850

What a pull back! Bulls finally showed today that they may be down but certainly not out. After taking a drubbing over the past seven trading sessions, the Indian market bounced back with a vengeance, notwithstanding the downbeat IIP data and reports of CBI raids on top PSU banks.



In fact, it was the first major day of gains in the new year for the Indian benchmark indices. The rally could be attributed partly to short covering and firm global cues. Investors and traders snapped up beaten down stocks after the recent reversals.

Realty stocks rebounded after being among the top losers in the past few days. The BSE Realty index gained more than 4%, while the Metals and the Banking indices also were among the prominent gainers.

The broader indices also participated in the relief rally today with the BSE Mid-Cap and the Small-Cap index rising 1.6% and 1.4% respectively.

The benchmark indices indeed had a good bounce back today. However, technically, the fear is that the poison may not be out of the system just yet. The Nifty was unable to breach the 100DMA. Volatility has increased lately and might stay elevated in the near term. Infosys results will be a major event tomorrow while December inflation is another important factor to keep an eye on for this week, says Amar Ambani, Head of Research (India Private Clients) - IIFL.

The Sensex gained 338 points to close at 19,534 and the NSE Nifty rose 109 points to close at 5,863.

Among the BSE sectoral indices, the BSE Consumer Durables index was the top gainer the index gained 4.6%, followed by BSE Realty index was down 3.2% and the BSE Metal index lost 2.8%.

The European indices were trading in the green as well, the DAX in Germany was up 0.4%, and the CAC 40 index in France was up 0.6% and FTSE index was up 1%.

Outside the frontline indices, the big losers in the broader market were Coromandal International, Torrent Power, P&G and Jet Airways. On the other hand, gainers included Renuka Sugar, Titan, Hindustan Oil and IFCI.