Aug. 2: Short covering and positive cues from the global and European markets, saw the Sensex move upwards to close at absolute gains both in points and percentage terms since June 21, when the Sensex closed up 1.7 per cent.
Banks stocks were the clear winners with ICICI Bank up 3.8 per cent with lower than provisioning indicating quality improvement in its assets, according to the brokerage HSBC. State Bank of India and Punjab National Bank, rose 3 per cent and 4 per cent respectively on hopes of better results. On Monday the Sensex closed at 18081.21, up 1.2 per cent or 212.92 points after touching an intra-day high of 18.104.24.
Nifty closed at at 5431.65, up 64.05 points or 1.2 per cent and saw a high of 5438.85 intra-day. Last week saw a negative bias of 1.5 per cent so it is likely that traders were covering their short positions, said Mr Pradeep Hotchandani of Anagram Securities.
This has helped boost the Sensex, which had initially opened strong on the positive signals from the Asian markets. There was also buying interest that was more pronounced in large cap stocks than smaller stocks says Mr Avinash Gupta of Bonanza Portfolio Ltd, who also expects that the Auto stocks could recover from the negative sentiment as the sales numbers for the month of July were good.
Analysts felt that the markets are generally under selling pressure and there was selling at every high. Both the Sensex and the Nifty traded in the range of 17911.31 and 18104.24 and 5351.30 and 5438.85 respectively. The Sensex is facing strong resistance at the 18,000 level and this is limiting its upside while the Nifty is likely to get support around 5350 and not go lower than that.