Indian markets witnessed a strong pullback rally on Monday, after falling sharply on Friday. The benchmark indices regained key technical levels on the back of over 3.5 per cent jump.
Commenting on the rebound, Ashish Chaturmohta, Vice President at IIFL Wealth said it is premature to say if a base has formed or not. "It is more of a pullback rally which can end at 5,050-5,100 levels... Crossing 5,000 levels would not be easy in the short term," he added.
Commenting on the rebound, Ashish Chaturmohta, Vice President at IIFL Wealth said it is premature to say if a base has formed or not. "It is more of a pullback rally which can end at 5,050-5,100 levels... Crossing 5,000 levels would not be easy in the short term," he added.
The Sensex closed 567.50 points higher at 16,416 and the Nifty gained 171.80 points to end at 4,919.60. On Friday, the Sensex had closed below the 16,000 mark while the Nifty had breached the 2008 lows of 4,776 indicating extreme bearish sentiments.
Despite the strong comeback, analysts were skeptical of a turnaround in the Indian markets. Saurabh Mukherjea, Head of Equities at Ambit Capital said, “Plenty of downside is left in the Indian markets because our economic fundamentals have weakened in the last year and half... The Sensex will probably move towards 14,500 by the year end."
IT stocks jumped 5 per cent. Among other big gainers, banking, metal, realty and capital goods stocks rose over 4 per cent. Barring ONGC and Maruti, all other Sensex stocks closed in the green. TCS was the top gainer, rising over 7 per cent. Jaiprakash Associates and JSPL ended with 6.5-7 per cent gains. Tata Steel and L&T advanced 5-6 per cent. Maruti closed marginally lower after renewed standoff at its Manesar plant.
Reliance Industries and Infosys gained 4-5 per cent. The two stocks together added 130 index points to the Sensex. Another heavyweight SBI advanced 2.5 per cent. Over 87 per cent stocks rose on the BSE 500 index suggesting a broad based rally.
NBFC stocks surged after RBI announced draft guidelines for new banking licenses. Bajaj Finserv rose 14 per cent, IFCI jumped 11 per cent, Reliance Capital gained 9.5 per cent and SREI Infra ended 8 per cent higher.
Most Asian markets closed with big gains on the back of the rally on Wall Street last Friday that sent the Dow higher by over 1 per cent to 11,284.54. While the Fed did not announce a new round of quantitative easing, Ben Bernanke left a window open for further economic stimulus in the event of a recession
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