Short covering on the day of derivatives settlement and a surge in shares of cement companies saw the equity markets close higher on Thursday, with the futures and options settlements recording an all-time high turnover of Rs 60,499.60 crore on the National Stock Exchange.
The Sensex ended at 14,504.57 points, up 73.51 points or 0.51 per cent, while the broader 50-share Nifty index of the NSE closed at 4282, up 18.05 points or 0.42 per cent.
Though the derivatives hit a record, market experts said there is no reason for undue worry.
When the equity markets crashed in May 2006, a section of market analysts had attributed it to a high open interest built up in the derivatives markets, which had forced highly leveraged investors to sell their shares to cough up margins.
“We expect the markets to remain firm in the very near term. However, it may undergo a small correction of say one-two per cent by the middle of next week,” said Jitesh Ranawat, derivatives analyst at Pranav Securities.
The market breadth was positive on the BSE, with 1,442 shares advancing against 1,141 declines.
Shares of cement companies saw good action in the cash as well as the derivatives segments after the finance minister told television channel on Wednesday that the government had no intention to put a freeze on cement prices. However, shares of companies that remained strong throughout the current month did not see much interest in the derivatives segment, brokers said.
Shares of ACC and Gujarat Ambuja gained 8.33 per cent and 7.43 per cent respectively to top the gainers’ pack in Sensex stocks. The other gainers were HDFC (up 5 per cent at Rs 1,958.45), Grasim Industries (up 4.82 per cent at Rs 2,623.50), BHEL (up 1.70 per cent at Rs 1,488.85) and State Bank of India (up 1.60 per cent at Rs 1,470.35).