The BSE Sensex on Tuesday rose 282.86 points, or 1.5%, its best daily gain in a month, to close at 19,229.84 on indications that RBI may ease money supply to boost growth and amid cues that the government would take more measures to stem the fall in the value of the rupee.
Metals, real estate, capital goods, bank and automobile stocks gained during the day, while Infosys rose to a lifetime high of Rs. 3,083.
“These sectors were oversold, so investors were covering their short positions,” said Sahil Kapoor AVP, retail capital markets, Edelweiss Financial Services. Short selling is a trading technique where investors first sell shares at high levels and then buy them back when prices fall, thus, squaring up their positions and booking profits.
Of the 13 sectoral indices, 11 closed with gains. But despite this, the broader market continued to present a bleak picture.
Since January 1, 2013, the Sensex has lost 1.79%. Over this period, the BSE Mid-Cap index and the BSE Small-Cap index have lost 22.83% and 27.96%, respectively.
In other words, while the Sensex has gyrated wildly through this calendar year, mid-cap and small-cap shares have been mauled badly.
“This lack of depth shows that all is not well with the economy,” said Sachin Shah, fund manager, Emkay Investment Managers.