Markets bag big gains for the day

Indian markets closed on a big gains today on the back of a better than expected rupee guidance reported by IT major Infosys. Global cues were also supportive, drawing the benchmark indices up by over 2.5%.

According to the IIP data released today India's industrial output rose a lower-than-expected 4.1 percent in August compared to 4.5% during the same period last year. High interest rates factored with global slowdown has taken beatings on the Industrial production.

After the clear signs of the slowdown in industrial activity, markets will watch the next move by RBI. All sectoral indices ended up in green today.

BSE IT index was the top gainer having jumped 5.21% or 273 points to 5,518 on back of better performance of IT major Infosys.

Bankex also jumped by 3.38% on the hopes that lower IIP data would prompt the RBI to take a pause on its interest rate hikes later in this month.

European shares opened low after Slovakia rejected to approve the Euro zone rescue fund, however bounced back in the next trading session.

Asian stocks rose on third straight day over good news on better US corporate earnings reports due soon in the USA. Barring Japan’s Nikkei and Taiwan Index all major Asian indices closed in green.

The Dow Jones Futures is currently trading 134 points or 1.18% up at 11464 indicating a positive sentiment in the US markets.

Among the SENSEX stocks, Infosys surged 6.8% over better than expected Q2 results. Infosys reported a 10% growth in its net profit to 1,906 crore in Q2FY12.

Among the metal stocks Jindal Steel was up by 6.08%. Other metal stocks were up between by 2% to 3.63%. Coal India was among the top losers in SENSEX stocks, indicating negative sentiments due to the ongoing strike in Coal India subsidiaries‎.

SBI, up by 6.07%, was top gainer among banking stocks. Tata Motors advanced by 2.60%.

Tata Power was the only stock that declined in power index today.

Stocks of Praj Industries rose by 5.64, highest among stocks in capital goods index.  We would like to advice our readers to watch movement in the price of Praj Industries, which is coming up with the quarterly result tomorrow.

BSE clocked turnover of Rs 2706 crore, higher than Rs 2710.42 crore on 11th October 2011.

The market breadth, indicating the overall health of the market, was positive. Out of 3265 stocks traded, 2133 stocks advanced while 1012 declined. A total of 120 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.