Markets respond positively to global cues

Mid Session Commentary 4th November 2011 (10:30AM)

As mentioned in our morning update, the markets opened positive in line with global cues. At present, the Sensex is up 165 points to 17647 and the Nifty up by 44 points at 5310.

Asian markets are also trading in the green zone, after Greece scrapped the referendum on the bailout plan, moving the nation closer to receiving aid.

Back home, BHEL continued its rally and is up 2.57% to Rs 337.70. Metal stocks like Hindalco, Sterlite Industries, Tata Steel and Jindal Steel are up 1-2.5%. Other gainers include RIL, DLF, SBI, ICICI Bank, Coal India, Infosys, etc., which are up 1%. Only two index scrips – Tata Power and HUL – are in the red zone, down by 1% each.

Oil marketing companies (OMCs) like HPCL, BPCL and IOC are trading marginally in the green after raising petrol prices by Rs 1.80 per litre. However, we fail to understand the rationale behind this hike in petrol prices, despite the fact that they were already making profits on fuel. The OMCs are incurring losses on subsidies in the sale of diesel, LPG and kerosene, and hence, the price hike should have been effected on these fuels if this was necessary. Bharti Airtel is trading up 0.60% at Rs 395, despites its weak Q2 FY12 numbers. Its topline increased by 13.4% to Rs 17270 cr, while its bottomline was down 38% to Rs 1027 cr on a YoY basis.

The market breadth, which indicates the overall health of the market, is strong. On the BSE, 1417 shares rose, 487 shares fell, and 63 shares remained unchanged.

In conclusion, we expect the market to remain volatile for the day. Today, companies like Apollo Hospitals, HCL Infosystems, Marico, Nestle, ONGC, TV Today, etc., will post their Q2 FY12 numbers. Also, European markets will provide some vital cues on the direction of the market trend in the late afternoon session.