Sensex rises 17.5% in April

As global markets recovered on Wednesday on fading impact of Swine flu on world economy, Indian markets followed the upbeat trend and reversed the 370-point loss on Tuesday. Backed by strong buying in software, banking and oil & gas stocks, prompted by short covering on the day of expiration of the April derivatives contracts, the sensex surged 402 points on Wednesday to close at 11,403 — its highest close in six months. The day's gains extended sensex's monthly gains to 17.5%, its highest single-month surge in nearly 12 years. Investors were richer by Rs 90,000 crore with BSE's market capitalisation now at Rs 35.6 lakh crore. After two days of declines, the main Asian and European markets posted broad-based gains. While the FTSE 100 of leading British shares was up 22.12 points, Germany's DAX rose 28.53 points to 4,635.95. France's CAC-40 was up 24.68 points at 3,075.79. Asian markets also did better. Hong Kong's Hang Seng gained 402 points to touch 14,956.95 and Shanghai's main index added 2.8% to 2,468.19. South Korea's Kospi benchmark finished higher by 38.18 points, or to 1,338.42. The 17.5% jump in sensex during April — from its March closing at 9,709 to its Friday closing at 11,403 — made India the best performing market in Asia during the month. The gains this month form part of the seven-week rally that has added a little over 42% to the benchmark index. However, brokers and dealers are taking a cautious approach. ‘‘There was substantial short covering today. Also there were arbitrage trades between cash and derivatives segments that helped lift the indices. So we are taking a cautious stance for Monday,'' said an institutional dealer with a domestic brokerage. The market is closed on Thursday for elections in the city. Market players also feel that with election results set to be announced in just about two weeks, there could be increased volatility over the next few weeks and a downside can't be ruled out.