Monday, August 29, 2011

Global cues aid markets; Sensex extends rally


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A bounce back was expected, and the Indian markets have got that in ample measure. The benchmark indices rose over 1 per cent on Tuesday, after witnessing the biggest rise in two years on Monday.  At 0930 hours, the Sensex was up 196 points to 16,612 while the Nifty rose 56 points to 4,975.

The Nifty made an intraday high of 4,998 in early trade, and bulls would be expecting the markets to close above the key level of 5,000 for the up move to continue. Sarvendra Srivastava, Technical Strategist at Emkay Global said the Nifty is heading back towards 5,100-5,200 levels but qualitatively one could not say if a bottom has been made.
Going forward, the first quarter GDP numbers might act as a trigger for the markets.
All sectoral indices were trading in the green led by high beta realty stocks. The realty index jumped nearly 3 per cent, more than any other index. DLF was the top gainer on the Sensex, rising nearly 4 per cent. Unitech also advanced after CBI said it did not have evidence that the company bribed the former telecom minister.

IT and banking stocks gained for the second successive day. Both these sectors have seen huge decline over the past few sessions. Metals, capital goods and consumer durables also rose over 1 per cent.

On the Sensex, 26 of the 30 stocks were trading higher. DLF was up over 4 per cent while Tata Steel jumped over 3.5 per cent. ICICI Bank, HDFC Bank and TCS rose 2-3 per cent.

Infosys, Reliance and SBI - the three big benchmark stocks were trading with big gains - supporting the markets. Four stocks - ICICI Bank, Infosys, RIL and HDFC Bank - added over 100 index points on the BSE Sensex.

ONGC was down nearly 3 per cent. Maruti, Bajaj Auto and ITC were other stocks in red. On the broader BSE 500 index, 89 per cent stocks advanced, indicating a strong breadth market.

Analysts were largely cautious despite second consecutive day of positive trade. Gaurang Shah, AVP at Geojit BNP Paribas Financial Services said Monday's move was surprising, but investors should lighten up their positions ahead of the two day break followed by the weekend. Sajiv Dhawan, MD at JV Capital Services said despite Monday's rally there was a lot of nervousness in the markets.
Consumer spending in the US rose in July after declining in June and that news sent the Dow 2.3 per cent higher to 11,539.25. The S&P's 500 index regained the 12,000 mark.

Buoyed by the rally on the Wall Street, Asian markets rose for a second straight day, led by Hong Kong's benchmark that surged over 2 per cent. Japan's Nikkei was up 1.4 per cent and the Chinese benchmarks were trading with over 1 per cent gains.


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