Robust performance in the markets, BSE Sensex up by 2%

Indian market moved strongly northwards for second day to catch-up to the positive global rally witnessed by major indices overnight. European stock markets opened in the green as banks gained on hopes for progress over Europe's troubled banking sector. Realty, IT and CD stocks had a good run up in today’s session.

Action by Germany and France to support banks boosted the confidence in other Asian markets which also were in green today. The Dow Jones Futures is currently trading 137 points or 1.22 per cent up at 11203 indicating a positive sentiment in the US markets

Among the SENSEX stocks, Tata Motors was up 7 per cent on the expectation of better volumes from its UK unit. Other Auto stocks like Bajaj Auto and Mahindra and Mahindra also showed a good run up. Maruti Suzuki on the other hand was trading lower by 3.58 per cent on reports of strike and violence at its Manesar factory premises. Among the Power stocks Tata Power surged 5.35 per cent to Rs 103.70. Coal India rose 1.68 per cent. Its union workers have called a one day strike over bonus related issues which will cause Coal India a production loss of 1MT and revenue loss of 120 crore. BHEL gained 2.18 per cent as the company has bagged a contract of Rs 4,071 crore from Singareni Collieries Company to set up a 1200MW power project in Andhra Pradesh.

BSE clocked turnover of Rs 2206 crore, higher than Rs 2072.47 crore on 7th October 2011. The market breadth, indicating the overall health of the market, was positive. Out of 3236 stocks traded, 1941 stocks advanced while 1155 declined. A total of 140 stocks remained unchanged.

In conclusion, we recommend our investors to not just blindly buy into this rally as there are still the macro concerns looming at large over the global as well as domestic economy. A high interest rate scenario coupled with stubborn inflation and subdued expectations for the Q2FY12 earnings still remain a key downside to this rally.