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ShareShort covering buoyed up an otherwise flat market as it ended with gains. The Sensex rose by 254.56 points and ended just below the 15,000 mark. The close of 14913.05 represents a gain of 1.74% over the previous day.
"The markets were flat despite weak global markets earlier in the day. One only saw gains in stocks where shorts had been built up suggesting that the rally was one fuelled by traders looking to cover their positions," said DD Sharma, Senior VP at Anand Rathi Securities.
Shorting a stock involves taking a position in anticipation of its price going down. When the opposite happens, the trader is forced to buy his stocks in the market or cover his shorts, thus pushing price levels higher.
The banking index was the top gainer of the day, up by 2.19%. Capital Goods and Power were the other top gainers of the day moving up by 1.90% and 1.84% respectively. IT and FMCG were at the bottom of the table among sectoral indices, gaining less than a half-a-percent each.
The National Stock Exchange rose by 75.40 points to close at 4424.25. This was a gain of 1.73% over Thursday. HDFC (closing at Rs. 2586.30) showed the most upside with a gain of 7.55%. Cipla (closing at Rs.260.75) rose 5.10%.
Cairn (closing at Rs. 228.90) and Hindalco (closing at Rs.83.80) down 2.14% and 1.18% respectively. There were 43 gainers to 6 declines among the Nifty fifty.
The railway budget, like the economic survey on Thursday proved to be largely a non-event for the market. Experts suggest that is largely positive.
"The Railway Budget is more reformist than populist. Rather than the giveaways in form of lower passenger tariffs, the focus is on productive utilization of spare land and develop infrastructure railway infrastructure under the public private participation model. No increase in freight tariffs is also positive for many core sectors like steel, cement etc," said Gaurav Dua, Head-Research, Sharekhan Limited.
