Markets Still In Winning Momentum

The Indian markets closed the day in the positive zone after remaining in the red for most part of the day. The broader indices, viz. Sensex and Nifty, closed higher by 0.4%. There was investor speculation that the RBI might take a CRR or a Repo Rate cut or both, which would further fuel growth in the economy. Of the sectoral indices, Capital Goods and Realty closed up by over 1%. Others like FMCG, Power and Bankex also closed higher in the green zone. The IT and Teck indices, though, closed in the red zone.

The peer Asian markets also closed the day in the red zone, with Hang seng, Nikkei and Shanghai closed the day lower in the red zone. One of the crucial reasons for the Asian markets trading lower today is because of Japanese trade deficit widened by 12.6% on a YoY basis.

European markets are also trading lower have also opened on a negative note with FTSE, CAC and DAX trading lower in the range of 0.4%-0.7%. This is after media reports stated that Investors were disappointed on the Fed’s reaming silent on the third round of QE and after Fitch rating agency downgraded Spain.

Dow Jones Futures is currently trading down 49 points or 0.39% at 12357, indicating a negative sentiment in the US markets.

Back home, Sterlite Industries was the leading index gainer, closing 3.5% up at Rs 100.60. Capital Goods heavyweights, L&T and BHEL, closed the day with gains of 2.53% and 1.58% respectively. FMCG majors, ITC and HUL, also closed higher by 1.33% and 1.24% respectively. Other stocks like Tata Motors, Sun Pharma, Hero MotoCorp, SBI, Wipro, NTPC, etc. closed the day higher in the green zone.

On the other hand, the Auto pack was among the losers, with stocks like Maruti, Bajaj Auto and Mahindra & Mahindra closing lower in the red zone. IT stocks also dragged the market southwards, with Infosys and TCS down by 1.38% and 0.75%. Others like Jindal Steel, ICICI Bank and ONGC also closed the day in the negative territory.

Fame India is trading 3.97% higher to Rs 49.75 after media reports that the company, along with three of its subsidiaries, is set to merge with the parent firm INOX Leisure. The company’s board is expected to clear the deal in its next meeting on June 15. After the merger, Fame will likely be rebranded as INOX, an individual familiar with the matter said on condition of anonymity. The merger will create the country’s largest multiplex chain with 257 screens.

The market breadth, which indicates the overall health of the market, was positive for the day. Out of the 3176 stocks traded on the BSE, 1563 advanced, 1493 declined and 120 remained unchanged.

In conclusion, we expect the markets to remain volatile for the next week. Investors would be keenly watching out for the Wholesale Price Index (WPI) data, which is expected to be released on Jun 14, 2012.