Key equity indices rallied on Wednesday in the wake of strong bounce back by global markets as investors bought back stocks or contracts that they had sold without owning them, ahead of the July derivative series expiry.
“This looks more like a short-covering rally ahead of the contract expiry,” said Vijay L Bhambawani, CEO of bsplindia.com.
“What needs to be watched is if the rally sustains till Friday. On the upside, the Nifty could see 4,460 to 4,500 point levels.”
Following the global rally, The National Stock Exchange index, Nifty, ended in green at 4,313 points, up 123 points and The Bombay Stock Exchange index, Sensex, rose 495 points to end the day at 14,287.21 points.
The rally was also aided by the US crude, which was trading marginally down at $121.8 per barrel on the Nymex. Shares of export dependent companies also witnessed good buying after the dollar hit a one-month high against the yen in the intra-day trading.
“There was good buying in IT stocks, especially in shares of small and medium companies,” said Dev Kapadia, chief dealer, Lalkar Securities. He said that a lot would depend on the US Crude Inventory data that is expected Wednesday night.