Sensex, Nifty scale new highs

BSE Sensex closed at 22,764, up 0.6% from its previous close while NSE Nifty ended above the 6,800-mark at 6,817

Traders covering short positions drove up markets on Monday as investors scrambled to cut losses after the unexpected rally seen last week. The BSE Sensex and NSE Nifty scaled highs on Monday after two weeks led by buying in banks, automobile and metal stocks.

The BSE Sensex closed at 22,764, up 0.6 per cent from its previous close while the NSE Nifty ended above the 6,800-mark at 6,817.

Analysts said fresh long positions were taken in ICICI Bank, Axis Bank and Maruti Suzuki. All are expected to declare fourth quarter earnings in the week ahead.

“There was short-covering in the market by traders surprised by Thursday’s upmove. But we saw fresh buying in some of the large-cap names. We had seen some buying on Thursday. That continued on Monday,” said Sunil Jain, vice-president (equity research), Nirmal Bang Securities. On Thursday, markets closed up 1.5 per cent. The NSE Nifty crossed the crucial support of 6,775, leading traders to cover their bearish bets.

Sentiment was lifted after the government rolled back the mining ban in Goa, allowing mining of up to 20 million tonnes in a year. Sesa Sterlite was among the biggest gainers, closing up four per cent.

Other gainers in the sector were Coal India and NTPC.

Overseas investors pumped in close to Rs 212 crore on Monday while domestic institutions were net sellers for an equal amount at Rs 217 crore.

But market watchers said that the uptrend was unlikely to continue as investors were being cautious ahead of the election outcome next month.