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Strong global cues from the US and the Euro zone sent the Indian benchmark indices up in excess of three per cent on Wednesday.
This is despite FIIs and DIIs both being net sellers, 254 scrips hitting the lower circuit as against 152 hitting the upper and 147 stocks clocking their all time lows on the BSE.
The Nifty was up 3.28 per cent (149 points) and closed at 4693.15 while the Sensex closed at 15,685.85, up 3.36 per cent (510 points).
FIIs were net sellers for Rs 144 crore and DIIs for Rs 133 crore. Retail investors on the BSE were net sellers to the tune of Rs 41 crore.
“I booked profits on a lot of Nifty stocks today,” said Mr Ashish Choudhary, a retail investor.
Market-men said that operators pumped up stocks that had a higher index weightage so that the indices moved up, while they sold those with lower weightage.
“This has come as a Santa rally prior to Christmas,” said Dr Nirakar Pradhan, CIO, Future Generali Life Insurance. “But we need to wait for a couple of days and see how things pan out.”
Analysts said Moody's revision of foreign currency deposit ratings of 16 Indian banks was one reason why indices spiked sharply the last half an hour of trade and also triggered a big rally in banking stocks.
All the indices on the NSE and BSE were in the green; the volatility index India Vix lost 10 per cent to close the day at 27.53.
Sesa Goa, RCom, ICICI Bank, Tata Power and Bharti Airtel were the top five Nifty gainers while IDFC, HCL Tech and Sun Pharma were the only three scrips to decline.
Meanwhile there was a lot of positive news on the global front. German IFO (a business sentiment data) data for December was 107.2 against the expected 106 while housing starts data in the US was 6,85,000 as against the expected 6,35,000.
Existing home sales also exceeded the expected 4.97 million and clocked 5.09 million.
The European Central Bank gave three-year funding of €489 billion to 523 European banks at one per cent interest.
Those in the street say that it was done to ensure that sovereign bond auctions especially in Italy and Spain do not fail, pushing yields up and worsening the existing liquidity crisis. However the jury is still out whether such methods of injecting a stimulus would really work, they said.
> raghavendrarao.k@thehindu.co.in
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