The stock markets opened on an insipid note but ended the day at higher levels on hectic short covering.
The Bombay Stock Exchange (BSE) sensex wound up at 3080.95 (plus 32.23 points) and the National Stock Exchange (NSE) Nifty 50 closed at 984.30 (plus 06.10 points).
The market breadth was positive as the advances to declines figures on the exchanges combined stood at 1212 : 604.
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Traded volume on the BSE was Rs 1,013 crore, while on the NSE it clocked Rs 2,370 crore.
The capitalisation of the market breadth was also positive as the numbers were Rs 2,122 crore : Rs 1,257 crore on a combined exchange basis.
The higher traded volumes are a sign of optimism as it shows a broader participation compared with the past 6 trading sessions.
However, most of the buying was due to short covering, which may peter out at higher levels.
The indices are precariously poised at below their short-term averages and will encounter resistance at these levels.
The Nifty will see selling pressure at the 1004 levels, if it reaches there.
The outlook for the trading session on Wednesday is that of cautious optimism if the overnight US markets remain firm. However, one must remember that the upmove is a bear market rally only.
Stock-specific activity maybe seen in Dr Reddy