Markets continue to rally

The markets have continued to trade on a strong and firm note led by sharp rally in major sectors like metals, capital goods and banks. The Agreement of European leaders to help contain the region’s debt crisis has lifted the sentiments across the globe.
 
The Asian markets continued its rally and have been witnessing positive trade as investors flock back to the equity markets, after the agreement on the long-awaited plan to resolve the European debt crisis was announced.

Meanwhile the European markets have also climbed up and opened on a positive note with gains between 0-1 per cent on the major European indices as markets already priced in EU meet event in Thursday's trade, rallying 3-6%.  

Back home, in the Metal and Mining space, Hindalco Industries gained 9 per cent and is the highest gainer on the Sensex. Other metal companies have also rallied with many of them were up by more than 6 per cent. On back of US economic accelerated growth and agreement of Europe to help contain the debt crisis.

In other large caps, ICICI Bank and JP Associates surged 5.8 per cent each. DLF and L&T rallied over 4 per cent. Reliance Industries, HDFC, HDFC Bank, TCS, Infosys, SBI, ITC, ONGC, BHEL and HUL gained 1-3 per cent. However, only Maruti and BPCL were under pressure.

The market breadth, indicating the overall health of the market, is positive. On BSE, 1628 shares rose and 1067 shares fell. A total of 97 shares remained unchanged.

In conclusion, we expect the markets to be positive for the remainder of the day and don’t expect much downside as much of the impact of the 25 bps rate hike has been already discounted. However concerns over rising inflation still persists at large.