After a three-day losing streak, domestic stock markets ended on a higher note on Wednesday, pushed by strong buying interest seen in banking, financial services, IT and energy stocks in late afternoon deals.
S&P BSE Sensex rose 489.80 points, or 1.27%, to close at 39054.68, while the NSE Nifty ended at 11726.15, up 150.20 points, or 1.3%, from the previous close.
Of the 30-stock Sensex, 24 stocks posted gains. Top gainers are HCL Technologies, ONCG, IndusInd Bank, Yes Bank, Bharti Airtel and HDFC gaining between 2.23% and 3.4%.
Top losers were Tata Motors, HeroMoto Corp, Coal India, Power Grid Corporation, Maruti Suzuki and Axis Bank, shedding between 0.07% and 3.33%.
Out of the 11 sectoral gauges on Nifty, all ended in the green, except auto, which witnessed profit booking. The NSE Nifty was led by Nifty PSU Bank (up 1.54%), Nifty Financial Services (1.39%) and Nifty Bank (1.29%). Nifty Auto, on the other hand, fell 0.42%.
A K Prabhakar, head - research, IDBI Capital, said with 50% voting done already, the market is possibly being speculative about the outcome. "While valuation is quite expensive, liquidity flow is keeping market high. This volatility will continue till the election result is announced," Prabhakar said.
Mustafa Nadeem, CEO, Epic Research, said Nifty rebounded taking support from its previous swing lows along with short covering ahead of expiry. A rebound was seen as buying emerged at lower levels in various sectors such as Banks, Energy, IT, Financials and PSUs. There was also some buying seen in smallcaps, he said.
"As Nifty goes to expiry tomorrow, it was a decisive day for bulls with the index sustaining the supports placed at 11600. The range for the market which was 11600-11700 is now pointing to somewhat between 11650-11750. This is a consolidation phase in Nifty, and given that the trend is positive we should utilise the dips in the short term. Only a close below 11580 would prove a point and help the bears. Till then we remain a buyer," he said.
According to Nadeem, there are some factors that are contributing to the distortion of bullish sentiments and an important one is VIX which is above 23 levels and sustaining. While it has risen over 40% in the last few weeks, the crude price has also remained elevated.
"Both these are putting a shady picture of the index in the short term as upside may remain capped," he said.
According to Pritesh Mehta, senior vice-president - research, Yes Securities, with Wednesday's rally, Nifty has given returns of 0.8% in April so far, showing remarkable resolve and resilience in holding ground above Tuesday's low of 11,565, a discernible sign of strength.
"Backed by the strength in Bank Nifty, we expect the index to provide follow-up moves and attempt to 12000 in the near term," he said.
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