It was a roller-coaster day on the BSE on Wednesday, as the Sensex sizzled up after an initial fall of 2.3 per cent on weak guidance by software leader Infosys about its new fiscal year earnings. Short-covering by pessimistic speculators sent the index up again on a day when the index swung 618 points between its high and low. The Sensex touched an intra-day high of 11,337.75 points and a low of 10,719.18 points.
The S&P CNX Nifty of the National Stock Exchange (NSE) gained 3 per cent to end at 3,484.15 points.
IT stocks have a 10 per cent weightage in the Sensex, which recovered to close at 11,284 with a gain of 2.9 per cent. The major gainers were Tata Motors (11.5 per cent), DLF (10 per cent) and BHEL (9.5 per cent).
The IT Index in which Infosys holds a weightage of 65.4 per cent, went down by 6.2 per cent towards the start of the trading day. But the Realty, Capital goods, Power and Banking indices rose sharply.
The realty index was up 8.8 per cent followed by the capital goods and the power index that were up 7.2 per cent and 5.4 per cent respectively.
Infosys closed the day with a drop of 2.7 per cent, after an initial plunge of 7.7 per cent.
“It is primarily the short covering of earlier positions that led the rally in the market,” said Gajendra Nagpal, CEO, Unicon Investments. “The rally is now moving into sectors that had not witnessed it so far.”
Marketmen said trading sentiment was influenced by reports that the Indian bourses are the world’s biggest emerging markets in the first quarter. They said the upward trend got support from predictions of more gains due to record-low borrowing costs boosting consumer spending, from market experts such as BlackRock and UBS.