Unsure if today's pullback rally will continue

By Udayan Mukherjee, CNBC-TV18

It was finally a day of relief for the market and a day of relief that did not fizzle out in the last one hour of trade. The markets closed at the highs of the day.

It was always going to be a good morning of trade after the kind of bounce that we saw from the US and the fact that crude had cooled down to USD 134-135 per barrel. All of it was coming on the back of tremendous damage that we have seen for stock prices in the last few days that set us up for a rally. The only question was after a gap-up, would the market hold on to that gap by the end of the session or would it give it all away. Today, it chose to go with the bulls and not with the bears.

So, we are up 140 points on the Nifty, up to 3,950 from the brink of 3,800 yesterday and the Sensex has rallied more than 550 points all the way up to 13,100. So, it has been a good day.

Largecap names were all sparkling today. HDFC, after its results, was the biggest percentage gainer on the index. DLF had a good move up. We had all those infrastructure stocks actually looking very good - L&T, BHEL, Reliance Infra, Siemens - and they all had excellent rallies today.

Even banks were not to be left behind. SBI, ICICI Bank and HDFC Bank were all up. Side counters include stocks like BPCL and ONGC. There were some good gains in the technology pack led by TCS and Satyam.

So, there were a lot of contributors to the index rise today. The only laggard was the metals sector. Steel was down quite sharply. It recovered a bit towards the end but stocks like SAIL, Tisco, and Sterlite were down.

Ranbaxy also had a rough session after all those news reports suggesting that the US Congress might be getting involved in the US FDA probe. RPL was struggling a little bit through the trading day today.

Outside the index as well looked good. The breadth was solid today about at about 700 to 450. Volumes were not too bad. But infrastructure once again was the star performer - JP Associates, GMR Infra, Punj Lloyd, and IVRCL.

Financials looked good namely, Axis Bank, Bank of India, Union Bank, Kotak Mahindra, and IDFC all looked pretty smart. Some of the newer listings like First Winner, BGR, and Lotus Eye did pretty well. Polaris also jumped a bit after the earnings came in.

So, there was a very good performance from the markets after a long time. But we don’t know if we can extrapolate that to a firm trend just yet. Right now, it is a pullback partly aided by short covering, partly by buying in many of the bluechips and largely on account of the good cues that came in from global equities.