Markets Reverse Intraday Losses

After opening on a negative note today, the Indian markets witnessed a lacklustre trading performance for most of the session. However, they bounced back in the last one hour of trade to close with decent gains. The Sensex and Nifty closed with gains of nearly 0.90% each. There wasn’t any major news for the markets, but they did go up almost by 1% despite the weak global markets. The Asian and European markets were both trading in the red on the back of the disappointing Fed measures. The rally in the last one hour of the trading session was led by renewed buying interest in the Banking, Capital Goods and FMCG spaces.

The other Asian markets closed mostly in the negative zone today. The Hang seng and Shanghai closed lower by 1.32% and 1.42% respectively, while Shanghai closed higher by 0.81%. Investors across the globe seemed disappointed with the Fed failing to announce any major stimulus measures to boost the economy. Also, the HSBC Chinese PMI Index declined for the eighth consecutive month of Jun 2012, which indicated a slowdown in the Asian giant's industrial growth.

European markets continue to trade negative post the US Fed's tepid moves of extending the bond programme to bring down the long-term borrowing costs and stimulate growth. The FTSE, CAC and DAX were down by 0.63%, 0.51% and 0.43% respectively.

Dow Jones Futures is currently trading 33 points or 0.26% down at 12730, indicating a negative sentiment in the US markets.

Hindustan Construction Company jumped by 3.65% to Rs 19.20 on the back of reports that its lenders will discuss the final CDR report on June 25.

From the Sensex shares, the Capital Goods stocks BHEL and L&T ended up by 2.33% and 1.51% respectively on news that the government will revive the contentious issue of imposing duty on foreign power equipment imported into the country.

We expect the markets to remain volatile and negative for tomorrow. In fact, we, at DSIJ, believe that the Indian markets will continue to see weakness in the near term on account of various concerns looming over the economy, and ask investors to exercise caution.