A good recovery for the markets from the lows of the day. The start of the week was familiar. We had bad news from the US, Asian markets were selling off, we started badly and within minutes of trade we were down nearly 4% on the index. It looked like another horrific start to trade. But clearly after falling 10% last week and another 4% this morning, the market might have got the feeling that it was getting overdone just in the near term.

So oversold markets, some buying came in at lower levels and then there was the familiar spree of short covering which brought the Nifty back from the brink of 4620-4630, all the way back up to 4800 levels thereabouts, and the Sensex which had plunged to under 15,400 in the morning, climbed back to 15,900 levels. So, a good recovery from the lows of the day.

In absolute terms it won’t show you much. It will still show you that the Nifty just closed about 15-20 points higher, and the Sensex actually closed in the red. But that is not the real picture of the day. From the lows of the day, there has been a very constructive move.

On higher volumes too, we have ended about Rs 65,000 crore which is a good 20% higher than the average volumes of the last few days. The breadth was terrible in the morning, but by the time we ended, there were about 3 advancing to 8 declining stocks which is not the worst that we saw compared to the lows of the day.

The midcap index too got into green though the smallcap index couldn’t quite follow. There is still quite a bit of liquidation going on there. There was a lot of buying in individual stocks led by the banks, State Bank of India, PNB, Union Bank, Indian Bank, Bank of Baroda; all those beaten down PSU banks came back today.

Telecom looked strong led by Bharti and R Comm. Oil across the board, whether it was ONGC, Cairn, RPL or Essar Oil, they were all up. Metals did well and select real estate stocks didn’t have a bad day.

The big fall of the day was L&T; nearly 9% down is where it has closed. That is because of a bit of a scare this morning that it would have to book some losses on its subsidiary because of commodity hedges. The company came in and clarified but even so the stock didn’t quite recover and there were many other stocks in the capital good space that did not look very good.

Lots of recovery stories today in midcaps from the lows of the day. There were meaningful rallies in Punj Lloyd, JP Associates, GMR, Hindustan Construction and Lanco Infra. So infrastructure and banking is probably where most of the bounce came in from.

Some realty stocks were still struggling, Unitech and Indiabulls. IDFC after sealing the deal with Stanchart Mutual Fund did pretty badly today, down about 8%. Some fertiliser stocks like Deepak did badly, some sugar stocks like Bajaj Hindusthan, and some of the private banks like Kotak and Axis are still struggling a bit. So, it was a mixed bag for midcaps.

But overall it was a day that will be remembered best for the intraday pullback perhaps led on by some short covering, some institutional buying and some recovery in global markets.