A dramatic recovery in the last 30 minutes of trading sent the BSE Sensex up by nearly 130 points and the Nifty by about 36 points, lifting the sullen mood of the investors today.
But the recovery appears more due to short-covering than due to any change in investor sentiment and any sustained rally looks doubtful at this juncture unless there are positive triggers such as sudden change in global investor mood or RBI softening its hawkish stance in so far as interest rates are concerned or a political thaw etc.
The impact of the turnaround could be gauged from the fact that the bank Nifty which at 2.55 pm was down by 106.50 points, turned positive by 28.55 points overhauling its huge loss by the time trading closed at 3.30 pm.
SBI was the biggest gainer in terms of value, up by Rs 34.25 at Rs 1,807 when the market closed. The same share was down at Rs 1,765.90 about half an earlier.
HDFC Bank, which was trading at Rs 427 at about 2.55 pm, rallied to Rs 442.90 at the close to emerge as the top gainer in terms of percentage (2.51 per cent or Rs 10.85). Axis Bank, which was down to Rs 947 at that time, recovered to close at Rs 972.
ICICI Bank, which hit its 52-week low of Rs 690.15, was able to regain the lost ground and closed higher at Rs 709.30.
The recovery of the bank Nifty was such that from 11 of the 12 bank Nifty stocks that were in the red at 2.55 pm, the loser’s list shrunk to just three banks at the close.
In fact of the three banks, Canara Bank, Bank of India and Union Bank, two of them were able to pare their losses a bit and only Union Bank’s loss at the time of close was slightly higher than 35 minutes earlier.