Markets have seen good come back in late trade, no particular set of stocks have led it the defensives like pharmaceuticals. Late rally is seen in many of the FMCG and capital goods stocks.

Here is a verbatim transcript of Udayan Mukherjee's comments on CNBC TV18. Also see the accompanying video.

Expectedly there is a pullback from the lows of the day, we started 4% down in the morning and last one hour we have seen quite a good pullback. The Sensex has clawed back above 10,000, now just modest losses and the Nifty too seems on its way towards close to that 3,000 mark. From the lows of the day the Sensex is up nearly more than 300-points and the Nifty too has climbed well over 120-points. It’s a good come back, no particular set of stocks have led it the defensives like pharmaceuticals etc have done well, we have seen late rallies in many of the FMCG and capital goods stocks as well, though metal still remains in the doldrums. We enter the last one hour, which could be quite crucial after the two-way moves that we have seen today.

We are getting a bit worried in the middle of the day because early morning pullback never quite fructified; it was just to and fro when the market bend down almost 4-5% so looked a bit scary in the middle of the day. But as we discussed in the morning that the first fall would be bought and sure enough after that cut which came in yesterday and the gap down today people have flocked in to buy Nifty at 2,900 or sub-2,900 levels. So couple of times during the day we have seen the Nifty drift down well below 2,900 go back to those 2,850 levels and from there in that zone of 2,850-2,900 we have seen a lot of buying emerging. There is a quite a bit of short covering which has happened today because the Nifty futures now trading almost at 13-14 point premium. So you can sense that along with a bit of nibbling which might have happened at lower levels in some of the defensives; a lot of people who might have gone short yesterday have covered up their positions and that has given some kind of fillip to the market.

The last one hour is very critical because things move very fast nowadays if indeed the markets can pullback and close above 10,000 and 3,000 Nifty then the bulls would take some heart that the market has not collapsed quite so easily and probably has another short or test of going into 3,200-3,250 zone. However if we give up ground in the next one hour and then close with fairly substantial losses of 200 odd points on the Sensex then you are still in that no man zone where you cannot even take trade with any degree of conviction.