Stocks end 2016 with 3% gains; volatility, black swan events dominate
Fresh buying into front line shares and continued covering of short positions helped markets to end higher for the 4th…
Stocks rose for a second session on Wednesday as traders continued to cover their existing short positions in a bid to meet the monthly deadline of derivatives' expiry. Pharma, software and media shares enjoyed the bounce.
Excessive amount of short positions were built into futures contracts over the past fortnight as the main index was in a downswing since December 13. These positions have to be extinguished before Thursday, the last day of December's derivatives market. Buying back of shorts is causing the market to rise. Overall, the broader trend remains weak as investors grapple with slowing economic demand as a result of demonetization. Sustained selling by overseas funds is also compressing local stock prices.
Meanwhile, here are the most important events of the trading day:
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* The Nifty gained 35 points to 8,068 points; Index rises for second day.
* Bharti Infratel, Zee Entertainment, idea Cellular, IndusInd Bank and Wipro rise 1.4-3.5 per cent, and are among 42 stocks that gained on the Nifty.
* Tata Steel, Tata Motors, Larsen & Toubro and HDFC slip 0.3-0.8 per cent; Among 8 decliners on the Nifty.
* The Sensex edges 97 points higher at 26,310 points. Wipro is the top gainer; Tata Steel the top loser and active trading interest is seen in ONGC.
* Broader markets are in an uptrend with the Nifty 100, 200 and 500 indices rising 0.5-0.7 per cent; Midcaps continue to outperform.
* Microfinance lender Bharat Financial surged 4.8 per cent on news that Morgan Stanley bought an additional 1.1 per cent stake from the market in the past week.
* Bharat Financial, Divi's Lab and Maruti were the top traded stocks by value.
* Bharat Financial was the top traded share by volume as well. Others included Jindal Steel, ITC and MTNL.
* The bulls were in command of the wider markets where 1,447 shares advanced versus 383 that fell.
* The mood was buoyant in the derivatives market as well with 150 futures rising compared to 25 that slipped. The new expiry takes root on Friday.
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