22 March 2011

Global cues support Market

Indian equity benchmarks bounced back on Tuesday, with surging 149 points on the Sensex led by global support and some short covering after fell in previous three sessions on rate hike fears, Middle East tensions and likely drop in RIL gas production. However, it slipped a bit from day's high in last one hour of trade as there were reports that Libyan Leader Gaddafi's forces attacked Libyan town of Zintan using heavy weapons.

The 50-share NSE Nifty gained 49.10 points or 0.92%, to close at 5,413.85, added support by oil & gas, infrastructure, auto, realty, metal, telecom and select financial companies' shares.

Jyotivardhan Jaipuria head-research with Bank of America Merrill Lynch (BoA-ML) says that the Indian market valuations currently reasonable.

He is bullish on the emerging markets over a period of three to five years while he is bullish on the developed markets in the short run. “Emerging markets will start performing once commodities cool down.” However, he believes inflation pressures continue to remain a concern.

Global markets were seen buying interest after Japan has made progress in its efforts to restore damaged nuclear facilities.

Japan's Nikkei outperformed other markets (it was shut on Monday), with rising 4.4% as there were reports that technicians working at the stricken nuclear plant on Japan's Pacific coast have managed to attach power cables to all six reactors and started a pump at one of them to cool overheating nuclear fuel rods.

Greed and Fear maintains the view that the stock market fallout from the natural disaster constitutes a major buying opportunity in Japanese equities, says Christopher Wood of CLSA. "Japanese corporates have proven they can live with a stronger yen and there are clear indications that Japan has commenced a new property upturn which increases the collateral value of the banking system."

Even the acquisition deal in telecom sector improved the global sentiment; the US markets closed higher by 1.5% yesterday. Deutsche Telekom surged 11% after AT&T acquired T-Mobile from company in USD 39 billion deal on Monday. Bharti Airtel rallied 3%, may be reacted to this deal.

Among other Asian markets - Shanghai, Hang Seng, Straits Times, Kospi and Taiwan were up 0.3-0.8%. European markets were quiet in trade today as they factored in all news in yesterday's upmove.

The 30-share BSE Sensex went up 149.25 points or 0.84%, to settle at 17,988.30 followed by 0.5-0.8% upside in broader indices.

Maruti Suzuki was the top gainer, with rising nearly 4% post management comments. RC Bhargava, chairman of Maruti Suzuki said that its Japan plant was safe and would resume production from tomorrow onwards. He said that the export production will not be impacted due to the Japan crisis.

Among other auto shares - M&M and Tata Motors gained 1-2%; Bajaj Auto and Hero Honda were up 0.5% each.

Heavyweights like Reliance Industries, SBI, HDFC, ITC, BHEL and L&T led the major support - gained about 1-2%. ONGC, Infosys, NTPC and HUL among others went up over 0.5%.

However, the selling in TCS, HDFC Bank, JSPL and ICICI Bank erased some gains in last hour of trade.

In midcap space, WABCO-TVS, Anant Raj Inds, Glodyne Tech, M&M Financial and Amtek Auto gained 6-9% while Shree Global tanked 17%. KGN Industries, Sunteck Realty, Puravankara and Fresenius Kabi fell 4-5%.

In smallcap space, Sequent Scient, Zenith Infotech, Gulf Oil Corp, Commercial Engg and Fame India rallied 10-15%. However, Modern India, Balkrishna Inds, Bheema Cements, Henkel India and Newtime Infra lost 5-8.5%.

About 1553 shares advanced as against 1308 shares declined on the Bombay Stock Exchange.

Crude oil prices remained steady today despite Libyan Leader Gaddafi's forces attacked Libyan town of Zintan using heavy weapons. London Brent crude was trading around USD 114.5 a barrel and the crude oil was around USD 102 a barrel on NYMEX.

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