Sensex gains 434 points ahead of Infosys Q4 numbers

The markets staged a spectacular rally on Wednesday recovering most of its losses from previous four trading sessions as well as the initial sell off in early trade. The rally was entirely backed by inflows from foreign institutional investors. Experts believe in anticipation of Q4 earning season, which will kick start on Friday with IT bellwether Infosys Technologies.

Mark Mobius of Templeton Emerging Markets Group said that Indian market is showing signs of investors returning to India once again. He is optimistic that India may see new highs by year-end. Mobius warns that lack of government action may pose a big risk to India.

''We are investing nearly 32% of the portfolio in emerging markets. There is a lot of liquidity for investment in equity, bonds and commodities,'' Mobius explained.

The 50-share NSE Nifty gained 125.80 points or 2.17%, to settle at 5,911.50, aided by 46 shares out of 50. Capital Goods, Auto, Bank, FMCG, IT and Oil & Gas were the leading sectors - respective indices rallied nearly 1.6-2.7%.

There has been an element of short covering today, says Rajesh Jain, Independent Market Strategist. "But this market is looking to buying with a positive expectation and if the result seasons indicate a safe FY12 there is no reason why we should not get past the 6000 mark."

The Nifty April Futures added 13% in open interest with 32 points premium. Nifty 5900 Call saw 20% shed in open interest which clearly suggests call writers had to cover their short positions. On the other hand, Nifty 5800 Put saw significant put writing activity with addition of 38% in open interest.