MUMBAI: As expected, Dalal Street cheered the ruling coalition's confidence vote win with a 838-point rally in Sensex to 14,942. Wednesday's gains, which made investors richer by nearly Rs 2.5 lakh crore, were also aided by another sharp drop in crude oil prices to around $125 per barrel and short covering by institutions.

Despite the 6% rise in the benchmark index on Wednesday, market players, still nursing the wounds from the six-month-old bear hammering, remain cautious and are looking at revival of FII inflows for the rally to sustain.
On Wednesday, the Sensex opened about 450 points higher and in late trades as institutions stepped in to cover their short positions, rallied close to the 15K mark.

While banking and financial services stocks like ICICI Bank, SBI, HDFC and HDFC Bank were at the forefront of the rally, select stocks from other sectors also helped the benchmark index to rally. On the BSE, banking index ended 10% higher, capital goods index closed 8.2% higher while real estate and power indices closed around 8% higher.

In the last five sessions, the Sensex has added nearly 2,350 points (19%) while BSE's market capitalisation has jumped a little over Rs 6 lakh crore to Rs 47.4 lakh crore.

Market players however are extremely cautious, because they believe the day's gains were aided by speculative short covering rather than genuine long-term buying. ‘‘Some more short-covering is expected in the market over the next few days. With market fundamentals hardly changed, at best the rally could continue till the expiration of July contracts (scheduled on July 31),'' said Pravin Agarwal, CEO, Lotus Investments & Securities.