Markets bounce back on short-covering

Riding on the bounceback seen in the afternoon trades, the BSE benchmark index, Sensex closed the day down 38 points at 19,545, regaining 239 points from day's low.

The Nifty closed flat with a negative bias at 5,868 after touching an intra-day high of 5,890.

Earlier in the day, the Sensex had touched a low of 19,307 due to sell off in the fronline stocks only to recover in the later half of the day where the SEnsex touched a high of 19,626.

The markets were weak for the larger part of the day due to negative cues from the Asian front.

Major indices in our neighbourhood such as Hang Seng and Nikkei were down in the region of about a percent each, thereby having a cascading effect on the trading activity back home.

However, the markets retraced most of their losses in late-noon

trades as the positive sentiment across the European market front negated the negative influence of the Asian peers.

The bounce back was aided mainly by the emergence of selective strength in metal and banking space.

Commenting on the bounce back, Ashish Chaturmohta, IIFL Wealth says, "Markets bounced back due to short covering.

Traders who formed short positions in the morning were trapped and their stop losses got trigged as markets began recovering and they were forced to buy to cover their shorts."