HDFC twins lift stock markets amid short covering
By S Jha
New Delhi, October 1: Reserve Bank of India on Friday hiked the benchmark Repo rate by 50 basis points and the accompanying commentary by Governor Shaktikant Das sent the bourses on a relentless short covering on the last day session of the week.
Sensex and Nifty snapped seven days of deep corrections to make smart recovery on firm notes, logging gains of 1016.96 and 276.25 points respectively.
Since the major market participants were trading short, they had to cover their positions, which drove the market higher
HDFC twins, which constitute major chunk of weightage on the bourses, traded firmly after having been smashed by seven days of selling led by the institutional investors. HDFC Bank alone was higher by over three per cent, which is a rare sight on the bourses. HDFC Bank helped Bank Nifty gain over 2.6 per cent. Banking stocks were buzzing in the hope that the RBI may not be as aggressive in hiking the rates in near future, as voices grow louder for pause since crude oil is trending lower.
The 5G theme also played out firmly on the bourses. On Saturday, Prime Minister Narendra Modi launched 5G services in the country. Major telecom players such as Bharti Airtel and Reliance have said they would scale up the rollout of 5G in large parts of the country in the next few months. This was reflected with Airtel logging handsome gains on the bourses, which again helped the Indian equity market
But the international market is still on downturns, and the next week will reveal whether the Indian bourses continue with short covering or return to the bear phase. Nasdaq and Dow Jones closed on Friday with losses of over one per cent each, while the European markets had a mixed day. Indian equity market by and large toes the global trends, and it’s still early to see if the indexes remain green on Monday.
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