Nifty closes at 2-month high ahead of expiry

Indian stocks closed nearly two-month high on Wednesday, backed by strong inflow of funds especially after the fuel price revision and ahead of expiry tomorrow. It was really a nice come back for the market from the 5200 level to close today's session above 5600 on the Nifty for the first time since May 2.

Rahul Mohindar of viratechindia.com feels that the rally can extend up to 5720. "I would definitely want to work with 5550 as an updated stop - clearly from a short-term trading perspective. But going forward it will continue to be banking and metals that would get biggish moves on the upside," he said.

Mohindar expects F&O expiry for the month of June in 5550-5600 range, wherein the market stuck.

The 30-share BSE Sensex jumped 201.41 points or 1.09%, to close at 18,693.86 and the 50-share NSE Nifty rose 55.15 points or 0.99%, to end at 5,600.45.

Not only short covering after sharp fall in last week's Monday but also value buying by foreign institutional investors pushed the Sensex about 1,000 points higher.

"FIIs probably are feeling that -- after the major events of Friday when the International Energy Association released reserves and sent Nymex crude down to USD 90 a barrel and followed that evening, the government of India took some very hard decisions on crude prices and tightened it's own belt by cutting down own revenues and all the states followed suite -- India coming out slowly out of the bad period it went into, so it could be a good time for value investing. Also it's been coupled with some very major short covering. So I should say that has also contributed to some extent to this steep rally," PN Vijay, Portfolio Manager explained.