Short-covering lifts Sensex 60 pts August 26, 2009
Posted by dhirendra1972 in Early Losses, Fresh Inflow of Money, Short-covering.Tags: Asset, Derivative Contracts, Domestic Institutions, Economic Measures, Equity, Foreign Institutional Investos, Indian Shares, Inflow of Money, Investors, Losses, Shares, Stock Market Conditions, Stock Valuations, Traders Shuffle
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Good morning friends. There is a short-covering that lifts Sensex to 60 points.
Equity benchmarks extended gains to the fourth straight session on Tuesday, as short-covering, ahead of the August derivative series expiry on Thursday, helped erase early losses and closed higher. The 30-share Sensex ended 60 points or 0.3% higher at 15,688.47. The 50-share Nifty closed 16 points or 0.3% higher at 4,659.35 on Tuesday.
Of the 2,816 shares traded on the BSE, 1,681 scrips advanced, 1,060 declined and 75 remained unchanged, suggesting that the investors are divided about the direction of the market. Combined trading volumes on both the exchanges shot up by Rs 30,000 crore (from previous week average) to Rs 1,07,000 crore on Tuesday, thanks to the rollover of derivative contracts to the September series.
Brokers said the market will continue to remain choppy over the next couple of sessions, as traders shuffle their positions ahead of the September derivatives series. They expect gains to be limited hereon, unless there is a fresh inflow of money from foreign institutional investors.
As per the NSE provisional data, foreign institutional investors net sold Indian shares worth Rs 260 crore on Tuesday. Domestic institutions net bought shares to the tune of Rs 436.59 crore.
Despite stock valuations being pricey, analysts do not rule out a stronger closing for equities in 2009 if money continues to flow into the asset. Morgan Stanley sees similarities in stock market conditions between 2009 and 2003, which saw the start of a liquidity-driven bull rally.
“An outcome similar to 2003 should not be ruled out, i.e., the market could close in 2009 on a strong note. Indeed, if at all, liquidity (both flows and economic measures) appears to be more forceful than in 2003, even though valuations are higher,” said Morgan Stanley’s strategists in a report. – The Economic Times
