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Sensex gains in choppy trade

March 25, 2009

The Sensex ended nearly 200 points up on Wednesday as investors covered positions ahead of the monthly derivatives expiry.

The session was volatile throughout the day, with the benchmark gaining momentum towards the close of the trade.

The top gainers included Jaiprakash Associates, which gained 7.5 percent, Tata Power, which was up 7.1 percent, DLF which surged 6.2 percent and Reliance Industries, which was up 5.6 pct.

MARKETS-SOUTHASIA-STOCKS/The realty sector saw good activity with Unitech (up16.7 percent) and DLF (up 6.2 percent) sending the BSE Realty Index higher by over 6 percent.

FII data showed a positive net investment in equities of $173.3 million, while a net selloff was seen in debt of $239.1 million

The rupee came off a one-week low, helped by the over 2 percent rise in the share market. The partially convertible rupee is now trading close to 51 per dollar. This volatility in the rupee is not a welcome sign for corporate India, as it will result in hedging losses and an appreciation in the rupee will result in depreciation of FII portfolio.

The 50-share NSE index ended 1.5 percent up at 2,984.35 after touching the day’s high of 2,996.

Though there is likely to be some volatility in the markets ahead of expiry of March derivatives, do you think the benchmark will be able to sustain the past gains?


Sensex stood at 9,647 on 31 December 2008.It now stands at 9,667.Thus it has recovered all its losses in 2009.It has since crossed level of 9,026 of 26/11.It may now attempt to break out from 10,335(Satyam saga).

Today’s rally is more of short covering before tomorrow’s expiry.Sensex has climbed 18% since 9 March.Investors would have cherished this rise had it been backed by some positive economic developments.

Investors remain wary of taking any long positions.They tend to book profits at the first oppurtunity.Investors are seeing a better oppurtunity in making a booking for a Nano car than investing in stocks.An estimated Rs.1,000cr.will move out of market to meet the “Nano effect”

It is likely that tomorrow’s trading may show some volatility on account of expiry but in any case a correction is due.

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