Markets Open In Green, Rate-Sensitive Stocks Up

As expected in our morning update, the Indian markets opened on a positive note today. The repo rate cut by RBI and the positive cues from the global market improved market sentiments. Earlier, the European markets rallied, with banks leading the gains on the back of a positive response for the Spanish bonds and a buoyant German economic sentiment.

Yesterday, the RBI announced a repo rate cut to improve liquidity in the system and to keep the economic growth intact. However, the cut in the repo rate raises concerns over increasing inflation, which is currently at high levels. The Sensex and Nifty are trading with gains of 0.80% and 0.86% respectively. Auto stocks have rallied today after the RBI cut the interest rates. Bajaj Auto, Tata Motors and Maruti Suzuki are trading higher by 3.13%, 1.87% and 1.37% respectively. Among the sectors, Capital Goods, Metals, PSU, Power, Bankex, etc. are all trading higher between 0.87%-1.22%.

Other Asian markets too are trading on a strong positive note. Firm demand at the Spanish debt sales in Europe, a positive start to the US corporate earnings season and an improvement in a key German sentiment survey boosted investor confidence across the globe. The Hang Seng and Shanghai are trading higher by 1.18% and 1.32% respectively, while Nikkei is trading strongly up by 2%.

HCL Tech has surged by 4.61% today on the back of strong earnings reported for Q4 FY12. The consolidated net profit of the company has grown by 5.2% on a QoQ basis to Rs 602.50 crore. However, the consolidated revenue of the company decline by 0.6% QoQ to Rs 5215 crore.

The market breadth, which indicates the overall health of the market, is positive. On the BSE, 1111 shares rose and 808 shares declined. 86 shares remained unchanged.

Overall, we expect the market to remain positive for the day.