Stock indices fly with frenzied short covering
By S Jha
New Delhi, November 24: The stock markets blasted to all time high on Thursday after the shorters were trapped with their positions and they went for short-covering on monthly expiry. The US Fed’s soft stance and the data suggesting inflation peaking had set up the bourses with a strong base formation on the higher side to launch for higher levels.
The Thanksgiving closure of the US markets helped the Indian bourses to go on an autonomous territory on Thursday. The day began with the indices sliding lower, but the HDFC pack began climbing up steadily to bring the bulls firmly in the market. With both the HDFC twins – HDFC bank and HDFC – already trending up on account of the suggestions that they are up for rerating due to the MSCI weightage revision, HDFC Life also joined the party to bring the full family pack driving the bourses. HDFC Life closed with a four per cent gains on Thursday.
The IT sector joined the party, with HCL Technology providing the early bullishness, while the likes of Infosys, TCS and tech Mahindra joining the bull rally. The IT heavyweights were all up by over two per cent, and since they have strong weightage on the indices, the bourses trapped the short-sellers, who went for short covering in the last one hour of trading. The foreign institutional investors too shrugged off their bearishness of the last few days and pumped in Rs 1232 crores in the market. The data from India in the recent days had been positive, while Finance Minister Nirmala Sitharaman has begun the pre-Budget consultations with the stakeholders. The direct tax collections along with the GST collections have been robust for the October month, which may provide deep cushion to Sitharaman as she set out to prepare for the Budget.
The COP27 in Sharm el-Sheikh has come up the agreement on the loss and damage financing by the developed countries to mitigate the climate change causes in the developing and underdeveloped countries, which is rubbing off on scrips in the solar energy sector. KPI Energy closed with gains of over five per cent, while other scrips such as the recently listed INOX Green Energy also gained despite the IPO having been priced dearly. With the indices breaking out from the range, the market participants are hoping for the bullish trend to sustain unless negative surprises drag down the bourses. Nifty, which had been trading in the range of 17800-18400 broke out on strong bullish note, and the index may trade in a new range in the December series even while there could be prospects of retracement as per the technical charts.
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