After slipping to a near 14-month low, the markets bounced back on the back of short covering with the benchmark index ending at 14,220 levels, up 113 points.
The Sensex had slipped to 13,731 levels in opening moves on the back of RBI hiking key lending rates on 24 June. In broader markets, the Nifty ended up 61 points at 4,252 levels.
The apex bank increased repo rate to 8.5% with immediate effect and raised Cash Reserve Ratio (CRR) to 8.75% with an effect in two stages on 5 July and 19 July to curb spiraling inflation.
“Sensex may test 13,870 – 13,800 support levels. On the upside, an immediate resistance is at 14,170 – 14,230. It is not advisable to go short near the support levels as the bounce back cannot be ruled out,” said a technical analyst with Angel Broking.
Buying at lower levels in heavyweights such as Reliance Communications (up 7.2%), DLF Limited (4.2%), Ranbaxy Laboratories (3.8%), Reliance Industries (up 3.4%), ONGC (1%) and NTPC (1%) helped Sensex recover lost ground.
However, most banking counters ended weak. Oriental Bank of Commerce was the biggest loser in this pack that skidded 6.2%. Allahabad Bank, State Bank of India, Yes Bank, Kotak Mahindra Bank, Canara Bank and Karnataka Bank were some of the other key losers.