Stock Market: All hands on deck, bulls, riding short covering, storm Dalal Street
By S Jha
New Delhi, March 1: After eight days of equity rout, bulls finally shrugged off doomsday fears to storm the Dalal Street, forcing intense short covering a day ahead of the weekly option expiry of Nifty and Bank Nifty. The Bank Nifty set up the equity market to titillate the bulls, which had been badly bashed by bears in the last eight trading sessions, to final come charging in to send the bourses soaring.
Nifty halted just before the immediate stiff challenge around 17465. Bank Nifty has once more given leadership to the equity market to stage a comeback from the rout. The mood was also set up by the turnaround in the Adani Group of Companies. The rally in the Adani stocks was partly on account of the speculation that the group has secured a $3 billion funding by Sovereign Fund. However, the Adani Group has denied the speculation in the post-trading session. But before the denial came, Adani Enterprises had staged a sharp rebound in the last two sessions, while its group companies were locked in the upper circuits.
The Bank Nifty gained strength from a sharp rally in the State Bank of India, which again had been bashed up by the bears for its exposure to the Adani Group of companies. The Bank Nifty also went trending because of the Axis Bank, which had been showing signs of strength even amid the rout in the overall market. Axis Bank formally took over the Indian retail business of the Citibank, which is likely to bring a rich pool of the high networth customers to its kitty. The Axis Bank sharply rallied to give a strong momentum to Bank Nifty, which also gained from the rally in the PSU banking stocks, besides IndusInd Bank.
The foreign institutional investors which had almost erased the infusion in the Indian equity market in the course of a week before the selloff struck the market once more sold a net of Rs 425 crores in the cash market. But their domestic counterparts outclassed them by pumping in a whopping Rs 1499 crores in the cash market to make a positive net institutional contribution of Rs 1074 crores.
The short covering kicked in soon after and advance decline ration majorly followed the gainers. The metal, auto, IT, cement sectors, which had been routed in the last eight days, gained strongly. The bourses are going into the weekly index option expiry on Thursday on the back of one day of gain and three days of losses, with indications that the short positions are still pending which need to be covered, according to the market participants with knowledge of the technical levels.
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