Sensex recovers on GDP numbers

Indian markets have erased their morning losses and turned green. Sensex is currently trading 34 points up at 16043.15. Nifty is trading marginally up at 4,810.65.

Other Asian indices have continued to trade in the negative. Nikkei is trading down by 0.50 per cent while Hang Seng and Shanghai index are down 1.79 and 3.27 per cent respectively.

Meanwhile, India’s GDP rose 6.9 per cent in the last quarter, in line with the market expectations.

European markets have opened in the red. All the three benchmark indices are trading down by 1 per cent.

Sectoral indices such as FMCG, IT, Teck, Oil and Gas, PSU and Bankex are trading in the green and have pushed Sensex into a n investor friendly zone. CD is still down 1.81 per cent, while Consumer goods is trading 0.97 per cent down. BSE 100 and 200 are trading marginally up on the latest GDP data. But BSE 500, BSE IPO, Small cap and Mid cap continue to trade in the red.

Among the 30 Sensex companies, 19 are trading in green while the rest are still in the red. HDFC bank has gained over 2.12 per cent. Shares of HDFC are also up 0.75 per cent. No other banking in the Sensex is trading in the green.

Tata Steel, Hindalco Industries have turned positive. Reliance Industries is also trading marginally up. Bajaj Auto and Maruti Suzuki are the only two auto stocks to be trading in the gainers list.

Among the losers, Sterlite Industries tops the list with a lose of 2.2%. Hero MotorCorp, M&M, Tata Power and BHEL are also seen trading in the red.

Meanwhile JSW Energy is up after the resignation of its CEO, Lalit Gupta.

The market breadth, indicating the overall health of the market, is mixed. Out of total 2603 stocks 1086 stocks advanced while 1402 stocks declined. A total 115 stocks remained unchanged.

In conclusion we believe the markets have already discounted the slower GDP forecasts. In fact when the GDP numbers came in, market cheered and turned positive.

However investors should note that this is only a temporary movement as macroeconomic issues like European debt crisis, inflation and lower industrial are expected to keep the markets subdued.