Short Covering Propels Nifty past 5700

The markets ended in a very strong note after a late rally propelled the Nifty past 5700 up 87 points over yesterday's close. Sensex was up 283 points ending past 19000 at 19230. The rally was predominantly due to the short covering after the markets slipped into over sold territory by the end of last week. Notably India Vix ttok a big knock ending the day below 20 after trading over the 20 mark the last few sessions.

Finally, even the banking stocks had a good outing, Realty and auto stocks also ended the day on a strong note. However metal and consumer durables stocks had an ordinary day. Mid-caps especially ones from the infra space had stellar runs for second day running.

However the disappointment was from a familiar quarter again – Currency. The Rupee started off the day weak and briefly traded below 61.50, however a late flourish coinciding with the nifty rally took is above the 61.20 support ending the day at 61.17. It is disheartening to see the currency trading below 61 even after the FM has announced slew of actions to support the Rupee. In the commodities universe Gold had another memorable session and so was the case with silver as well.

After a two days rally it is left to be seen how far this short covering can take the markets on the way up.

------ Harish Sridharan