Backed by heavy short covering and expectations that Fed would continue with quantitative easing, Sensex surged again near to its three year high. The benchmark Sensex rose by 358.73 points to 20,929.01 and the broader index Nifty gained 119.80 points to 6,220.90, to its new three year high.
After falling by nearly 324 points in last five sessions, Sensex rose sharply on back of strong short covering. Ravi Rastogi of Globe Capital said, “The real reason was the heavy short covering done by financial institutions as RBI improved liquidity by reducing MSF.”
All the 13 BSE sectoral indices advanced, led by interest rate-sensitive bank, real estate and automobile shares. Bank index gained the most by 4.35 per cent followed by real estate and automobile indices which jumped by 2.44 per cent and 2.43 per cent respectively.