Markets close on a positive note

Indian markets gained over 1% and closed on a positive note ahead of second quarter results of industry heavyweight TCS and Reliance industries. Sensex opened on a subdued note today however turned into positive in the later sessions as European markets gained momentum. The benchmark index got positive support from stocks in IT, Teck, FMCG and Oil and gas sector, which gained by between 1.09 to 2.61%. The September inflation data showed that WPI rose at 9.72% against 9.78% in August. RBI is uncomfortable with growing inflation. RBI may go ahead with one more 25 basis points hike in interest rates on October 25 according to the industry experts.

European stocks were trading positive in early trades. Earlier today S&P downgraded Spain by one notch on weak growth outlook. ‎Asian markets closed in red after Spain downgrade and Chinese inflation data.

The Dow Jones Futures is currently trading 82 points or 0.72% up at 11474.00 indicating a positive sentiment in the US markets.

Among the SENSEX stocks, Jindal steel was the top gainer with 5.01 increase in its share price. Other metal stocks however closed lower. IT major TCS rose by 4.01% over better earnings estimates expected on Monday 17th October 2011. Wipro, which is due its second quarter results by 31 October also rose by 3.98%.

Cairn India and Reliance industries from Oil and gas sector also ended up in positives ahead of quarterly results. Among the banking space stocks of ICICI bank and HDFC bank gained while that of SBI ended lower. Coal India further reduced by 2.91% and was the major loser today.

NTPC which is facing severe coal deficit was also among the losers list. Hathway cables gained 20% as government has announced new policy about the cable networks. Shares of Spicejet gained 7.13% as company allotted preference shares to its promoters Kalanithi Maran. Shares of Maruti further dipped today following strike at Manesar plant.

On the results front Reliance industries is to announce its second quarter results tomorrow and TCS on Monday. We advice our readers to keep track of the share price of these two companies.

BSE clocked turnover of Rs 1889 crore, lower than Rs 2523.74 crore on 13th October 2011. The market breadth, indicating the overall health of the market was positive. Out of 3222 stocks traded, 1625 stocks advanced while 1464 declined. A total of 133 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.