Investors See Buying Opportunity, Markets End Higher

The Indian markets had a good trading day today. The markets opened in the negative zone today, and then continued to show strength through most part of the day, closing higher by almost 0.70%. Buying was seen in the markets, which helped them close on a positive note. In the previous five trading sessions, they were continuously trading weak. Except for FMCG, all the sectoral indices closed in the green zone. The top indices today were Capital Goods and Metals, which closed higher by 3.07% and 2.21% respectively.

The other Asian markets ended with mixed results, with Nikkei closing in the red, while Hang Seng and Shanghai were higher in the green zone.

European markets are trading in positives, holding some of their morning gains. Major indices like CAC, DAX and FTSE are up in the range of 0.29%-1%. The higher trades are offsetting a report that showed that the Euro zone avoided a recession in the first quarter. This was due to stronger-than-estimated growth in the German economy, which is one of the largest in the zone.

Meanwhile, Dow Futures is trading higher 63 points or 0.50% up at 12718, indicating a positive sentiment in the U.S markets.

Back home, Capital Goods heavyweight L&T continued its momentum from yesterday. Today, the stock closed 5.41% higher at Rs 1222.50. This was on the back of good Mar 2012 quarter results posted by the company. Metals stocks are shone as buying was seen in most of the shares that were beaten down heavily in the past trading sessions. Stocks like Sterlite Industries, Tata Steel, Jindal Steel, etc. closed higher by more than 2% each. Realty major, DLF, also closed higher by 2.5% at Rs 186.90. Others like RIL, Tata Motors, BHEL, HDFC, etc. closed the day marginally in the green zone.

On the other hand, NTPC was the leading index loser, down 2.94% to Rs 143.50. The stock hit its 52-week low after the company slashed its capacity addition target. Auto stocks, viz. Maruti Suzuki and Mahindra & Mahindra closed the day down by 2.57% and 0.13% respectively. The defensive FMCG bets, ITC and HUL, closed lower by 1.35% and 0.15% respectively. Other stocks like TCS, HDFC Bank, Coal India, ONGC, etc. closed the day negative.

BPCL closed up 2.49% at Rs 728.15 after hitting a 52-week high of Rs 739.60 on an intraday basis. This was on the back of news that yet another well in the Mozambique gas block has struck a good quality reservoir. IVRCL closed 4.10% higher at Rs 46.95 on reports that the company has bagged orders worth Rs 652 crore. Everonn Education closed 0.53% higher at Rs 189.50 despite posting losses of Rs 63 crore in Q4FY12 against a profit of Rs 26 crore in the similar quarter last year.

The overall health of the market was positive for the day. 1568 shares advanced, 1454 shares declined and 134 shares remained unchanged for the day.

We believe that investors must take a wait and watch approach. Watch out for stocks like Bajaj Finserv, Dish TV India, Blue Star, Edelweiss Capital, 3i Infotech and JK Lakshmi Cement, which could see some volatility on the back of their Mar 2012 quarter results announcements. We advise investors to play with caution.