Indices surge on short covering

The subdued opening in the morning was on expected lines as the markets have been rallying for three straight sessions now. The continued up surge in oil prices, weak US markets yesterday and weak opening for most Asian markets in the morning added to the negative sentiment.

However, short covering on the settlement day for the May futures and options series changed the mood of the market dramatically in the afternoon. After remaining sideways till early in the afternoon, the indices surged dramatically in the late afternoon.

A further sharp up surge in the last half hour helped the indices to close the day with gains of well over a per cent each. Nifty outperformed the Sensex on the back of strong gains in TCS and ONGC. TCS is not part of the Sensex and ONGC has a higher weight on the Nifty.

Sensex closed at 6671, up 73 points and the Nifty at 2075, up 31 points. Nifty June futures discount to the spot index widened to 40 points from yesterday's 26 points.

Among Nifty stocks, Tata Chemicals, Wipro and BHEL were the major percentage gainers while BPCL, HPCL and Shipping Corporation were the major losers.

US markets remained weak yesterday after the surge in crude prices and fresh concerns of interest rate hikes. NASDAQ broke its run of 8 consecutive days of gains. Both Dow and NASDAQ closed with losses of around half a per cent each.