Markets ended a choppy session of trade in the green led by gains in banking and oil & gas shares.After two days of pull back rally, Nifty opened in the red at 5,468 on back of lacklustre cues from Asia and swung between 5408 and 5507.
The S&P CNX Nifty tested 5500 in the last leg of trade and pared some gains to closed at 5481, up 25 points supported by rally in banking stocks.
The Sensex ended up 72 points, at 18,273.
Analysts expect a further 10% dip from these levels if situation does not improve at the macro level. Nilesh Shah, MD & CEO, Envision Capital Services said, "we think the markets have been oversold in the short-term.
In the near-term, we could witness a bottoming out at these levels. However, if macro-economic issues continue to simmer, a further 10%. downside can't be ruled out from 17,000-levels, which seems a good bottom."
On other hand Mahesh Patil, Head Equity (Domestic Assets), Birla Sun Life Mutual Fund said, "we are not in a bear grip. Certain levels need to be broken like 15,500 on Sensex to say with conviction that we are in a bear grip."
While markets have risen 4% in past two days, domestic investors have not made a dramatic come back after therecent correction. Patil said, "domestic investors are coming back, but very slowly as still there is fear as things have happened very swiftly in the past."
Patil recommends investors to accumulate slowly
Among other Asian markets, Hong Kong's Hang Seng fell 1%, Japan's Nikkei rose 0.2% while China's Shanghai Composite closed flat, up 0.01%.
ADAG stocks climbed after leading the losses in the past few sessions. Reliance Capital was up 8.2%, Reliance Communication jumped 3.8% and Reliance Power was up 2.2%.
From the Oil & Gas space, Reliance Industries was up 2.9%, Indian Oil Corporation gained 1.9% and ONGC was up 1.1%.
Hindustan Copper gained 18%, Dredging Corporation surged 8.5% and HMT advaced 5.3% from the PSU space.
Banking shares were leading the gains, ICICI Bank was up 2%, Punjab National Bank surged 3.5% and State Bank of India zoomed 1.4%, Kotak Mahindra Bank surged 3.4% and Yes Bank gained 2.7%.
Capital Goods index was leading the losses, Reliance Industrial Infra fell 17.3%, Havells India dipped 2.5% and BEML declined 1.3%.
Broader markets were trading mixed, the midcap index ended flat and smallcap index was up 0.6%.
Top gainers on the Sensex were Tata Motors, up 2.4%, Bajaj Auto surged 2.2% and Tata Power was up 2.1%.
Market breadth was positive, for 1549 stocks which advanced 1264 stocks declined.
