Mumbai: It was a relief rally for the Sensex - shot up 3 per cent - on Wednesday after a big rout in last two weeks (fall of over 1500 points), reacting to sharp upmove in global peers since Tuesday. As expected by many technical experts, the short-covering led rally took past the Nifty 4700 mark in last minutes of trade, before closing up 148.95 points at 4,693.15.
Meanwhile, the Sensex ended off 25-month lows, was up 510.13 points at 15,685.21. Banks, technology, oil & gas and capital goods stocks surged quite smartly.
Sudip Bandyopadhyay, MD & CEO of Destimoney Securities feels it’s definitely a technical move.
Other reasons behind sharp uptick were US housing starts for November at 1.5-year high, unexpected improvement in the German business sentiment index and better-than-expected Spanish bond auctions. Federal Reserve proposed new capital and liquidity rules for US banks, which would be rolled out in two phases.
According to Sudip, the rally is also supported by the fact that ECB has taken some steps to enhance liquidity to ensure that the bond auctions go through.
European markets were trading 0.6-2 per cent higher. The Dow Jones futures gained 124 points. Asian markets closed 1.5-4.5 per cent higher barring Shanghai, which lost over 1 per cent.
The momentum also looked strong after Moody's reaffirmed India's Sovereign rating at Baa3 and unified sovereign local, FX debt rating
Sandip Sabharwal, CEO, Portfolio Management Services at Prabhudas Lilladher said it would be a good case for going into banking stocks because some of the banks look attractive.
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