Markets Extend Rally

The Indian markets are trading higher in the green zone, extending yesterday’s big rally. However, both the indices have come down from the day’s high and are now trading up by about 0.5%. Among the sectoral indices, Bankex is the leading gainer, up more than 1%. Others like Realty, Auto and Metals are trading higher in the green zone. Consumer Durables is the only index trading in the red zone, lower by almost 1%.

Of the other Asian markets, Hang Seng and Nikkei are trading higher in the green zone, while Shanghai is marginally down by 0.77%. The Chinese market is trading lower after media reports that the economy had expanded 8.1% in the first 3 months of 2012, the slowest pace in the last 11 quarters.

The European markets have opened on a marginally positive note, with FTSE, CAC and DAX trading higher in the range of 0.16%-0.3%. Investors are waiting to take cues from the Spanish and French debt auctions and Bank of England’s interest rate decision.

Back home, Auto is the leading index gainer. Maruti Suzuki and Hero MotoCorp are trading higher by 2.65% and 2.53% respectively. The banking space is seeing some buying opportunity on the back of investor speculations that the RBI may cut the interest rate in its monetary policy review. HDFC Bank, ICICI Bank and SBI are trading higher in the range of 0.5%-2%. Other stocks like Bharti Airtel, ITC, Cipla are trading marginally in the green zone.

On the other hand, Wipro is the leading index loser, down 2.08% to Rs 400. The other leading IT player, TCS, is also trading lower 1.12% at Rs 1239.2. Stocks like Hindalco, Mahindra & Mahindra, GAIL India and ONGC are also in the negative zone.

Reliance Industries is trading up by 1.76% at Rs 726.65 after its annual general meeting at noon today. According to media reports, the chairman, Mukesh Ambani, said that the company would invest Rs 1 lakh crore across the business over the next 4 years. Further, he added that in next 3-4 years, the company plans to achieve a total production of 60 mmscmd of gas for a sustained period.

The market breadth, which indicates the overall health of the market, is strong as of now. On the BSE, 1295 shares gained, 1083 shares declined and 116 shares remained unchanged.

We expect the markets to remain volatile with a positive bias, and advise readers to play with caution.