Short covering helps market buck Asian trend

Consumer durables, realty and metal sectors lead 403-pt gain.

Bucking the bearish trend in the Asian markets on Friday, Indian markets rallied on the back of short covering in most counters that got battered in yesterday's fall, ending the week on a high note.

Most Asian markets closed in the red with key indices, Hang Seng down 64.53 points or 0.29 per cent and Nikkei 225 down 191.84 points or 1.54 per cent on concerns that credit market losses will widen and the dollar will weaken. 

POSITIVE TERRITORY
Share Price in Rs	Mar 14, '08	% Chg*
Sensex top gainers
Reliance Energy	1296.15	8.26
DLF	654.25	7.83
Jaiprakash Asso.	236.25	7.83
ICICI Bank	878.20	4.81
Hindalco	181.55	4.52
Sensex top losers
Bharti Airtel	752.95	-3.27
M&M	649.45	-1.75
Ambuja Cements	120.00	-0.70
Maruti Suzuki	835.20	-0.54
BHEL	1878.95	-0.20
* Over previous close

Benchmark index the Bombay Stock Exchange's (BSE) Sensex closed at 15,760.52 points, up 403.17 points or 2.63 per cent.

Broadbased Nifty closed at 4745.8 points, up 122.2 points or 2.64 per cent. In the last week alone, the Sensex has lost 215 points or 1.34 per cent.

The mid-cap index lost 220.94 points or 3.24 per cent and the small cap index lost 329.68 points or 3.9 per cent.

"Counters such as ICICI Bank and DLF spurted on Friday after traders rushed to cover their short positions. The market was mainly driven by short covering on Friday because it being Friday, people are unwilling to take fresh positions in the market. One does not know how the market will behave on Monday," said a dealer.

Consequently, sectors such as consumer durables (The BSE Consumer Durables Index was up 4.03 per cent), realty (the BSE Realty Index was up 4.76 per cent) and metals (BSE Metals Index rose 3.28 per cent) saw intra-day rallies.

"Every small rally in the market will be used by investors to sell," said S Ranganathan, Head-research at LKP Securities.

Meanwhile, inflation data that came on Friday indicated that the wholesale price index rose 5.11 per cent in the 12 months to March 1, higher than the previous week's 5.02 per cent and well above a market forecast of 4.97 per cent, data showed on Friday.

It was the highest since a reading of 5.15 per cent on May 26, 2007, and the second consecutive week above 5 per cent, the level at which the Reserve Bank of India (RBI) wants to limit inflation in the financial year that ends in March.

Market participants say that the market was expecting higher inflation and as a result did not react much to the data on Friday but the reaction could come on Monday with the markets possibly opening gap down next week.

Technical analysts say that for around 8-9 weeks now, Indian markets have been in a bearish zone and the long term trend does not look too bright as the bears are at the forefront at least for now.