Mumbai: Equities markets opened strong, rallied for some time and again lost ground in volatile trading on Monday after three successive days of losses last week that had seen a key index dip to the four-digit level for the first time in over two years.
Mid-afternoon the sensitive index (Sensex) of the Bombay Stock Exchange was ruling at 10,245.48, up 270.13 points or 2.71 percent against its previous close on Friday at 9,975.35 points.
The Sensex opened at 10,160.47 points, rallied to touch an intra-day high of 10,538.05, a gain of 562.7 points or 5.64 percent against its previous close before sliding again.
At the National Stock Exchange, the broader 50-share S&P CNX Nifty index also showed a similar trend - opened strong, rallied and then began to slide to rule at 3,130.25, up 55.9 points or 1.82 percent from its previous close Friday at 3,074.35 points.
The Nifty had also moved up by more than 250 points before sliding.
The BSE midcap index was at 3,525.01, down 19.83 points or 0.56 percent from its previous close Friday at 3,544.84 points.
The BSE smallcap index was at 4,133.58, down 34.28 points or 0.82 percent from its previous close Friday at 4,167.86.
Analysts said the initial rally was on short covering as there was news that the market regulator was contemplating a ban on short sales. Besides, there was enough profit opportunity as the Sensex had slid by nearly 2,000 points over the last week.
“But there is still too much uncertainty and while you can price risk, you cannot price uncertainty, so any rally we may see may be short-lived,” said Jagannadham Thunuguntla, head of the capital markets arm of India's fourth largest share brokerage firm, the Delhi-based SMC Group.
“There is still no confidence in the market and no one is willing to lend or invest,” said Gautam Mazumdar, chief underwriting officer of HDFC ERGO General Insurance Co. Ltd.
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