The BSE Sensex shrugged off choppy Asian markets and rallied 2.1 per cent on Wednesday to its highest close since early January,boosted by short covering ahead of the expiry of monthly derivatives contracts. The rise,for the third straight session,took gains to 20 per cent from the 2009 low hit on March 6,helping the market recoup most losses caused by the corporate fraud unveiled by outsourcer Satyam Computer Services on January 7.
Energy giant Reliance Industries and HDFC Bank led the rally,but traders said there was resistance and mobile operator Bharti Airtel and Oil & Natural Gas Corp dropped.
The 30-share BSE index firmed 2.08 per cent,or 196.86 points,to 9,667.90,its best close since January 6,the day before Satyam said it had overstated profits for many years and triggered a market slide. The benchmark had started 0.3 per cent lower and seesawed through the day,rising as much as 2.5 per cent at one stage. DD Sharma,vice president at Anand Rathi Securities,said the rise was underpinned by the derivatives expiry on Thursday. Short sellers need to cover their positions when the market is moving up with only one day left for the futures settlement, he said. Twenty-two of the index components rose while in the broader market,gainers marginally led losers 1,271 to 1,221 on heavy volume of 346.7 million shares. Traders said potential risks for a sustained upside were the slowing economy and political instability worries. A Reuters poll showed inflation in mid-March was probably near zero,an all-time low since annual records started in 1977-78.