Indian Markets continue to trade on a strong note

Mid-Session Commentary 24thOct 2011

The Indian Markets continue to trade on a strong note led by consistent buying in oil & gas, FMCG, technology, banking and metal stocks.

Meanwhile, European markets too opened on a firm note, buoyed by news that euro-zone leaders are making progress toward agreeing measures to tackle the sovereign debt crisis. This is also ahead of EU summit on Wednesday and G-20 on November 3-4.

Back home, amongst the SENSEX stocks ONGC, TCS, Bajaj Auto and Tata Motors were the biggest gainers, climbing 3-4.5 per cent. Among other large-caps, ICICI Bank, Reliance Industries, Infosys, ITC, HDFC, HUL and SBI moved up 1-3 per cent.

Among the individual stocks, Bajaj Auto was trading higher by 4 per cent at Rs 1,699, its all-time high level, after improving operating profit margins by 100 basis points at 20.1 per cent in Q2FY12 due to higher realisation from exports, operating leverage and the rationalization of spends on sales

Blue Star has plunged 8.3 per cent to Rs 198, its 52-week low level, after reporting a net loss of Rs 20.80 crore in the quarter ended September 30, 2011. The company had reported a net profit of Rs 38.85 crore in the corresponding quarter of previous year.

Suzlon Energy also added 4 per cent at Rs 38 after reporting a turnaround results for the quarter ended September on back of higher sales of its wind turbines and an exceptional gain on account of sale of its stake in Belgium's Hansen Transmissions.

All the sectoral indices barring the BSE capital goods index were trading higher. BSE Auto index was the top gainer, the index jumped 2.2 per cent or 194 points to 9,042. Realty index added 2.15 per cent or 38 points to 1,810. IT, Bankex, Oil & Gas, Metal, Consumer Durables, Power, PSU and FMCG indices were also among the gainers, up 1.3-2 per cent each.

Maruti Suzuki, Ashok Leyland, Hero MotoCorp, Apollo Tyres, Mahindra & Mahindra, Bharat Forge and Exide Industries were the prominent gainers from the auto space.

From the metal space, Tata Steel, Sterlite, Hindalco and Jindal Steel jumped 1.6-2.8 per cent. However, L&T and Reliance Communications lost over 1 per cent.

The market breadth, indicating the overall health of the market, is positive. On BSE, 1411 shares rose and 1231 shares fell. A total of 118 shares remained unchanged.

In conclusion, we expect the markets to be positive for the remainder of the day but do expect some volatility to kick-in in late afternoon session, as investors and traders start speculating over the possibility of another rate hike by the RBI in on 25th Oct 2011.