InvestorQ : What was the reason for the Sensex rallying by nearly 1000 points on Wednesday 27 May?
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What was the reason for the Sensex rallying by nearly 1000 points on Wednesday 27 May?

Answer
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Dhwani Mehta answered.
5 months ago


Interestingly, banks led the markets higher on Wednesday but that that could largely be bouts of short covering ahead of the monthly expiry on 28 May. Combined with some fundamental cues, the Sensex ended 996 points higher a day ahead of expiry. There were five reasons for the sharp rally on 27 May.

· Most banks were oversold and short covering added to the positivity in the markets

· It began with tourism but the indications are that restrictions are being eased

· Global demand for oil and other commodities is beginning to pick up once again

· Bargain hunting in specific stocks in the private banking and NBFC space.

· There were hopes that the government would announce another stimulus

However, it remains to be seen if the rally can be sustained.