Markets In Show Of Strength, Over 2% Up

The Indian markets are showing good strength in today’s trade as the broader indices Sensex and Nifty are trading up by over 2% each. This up-move is a combination of both domestic as well as international cues which are providing impetus to the markets. Positive draft guidelines on GAAR coupled with some sense of confidence emerging from the EU summit have been contributing factors.

All the sectoral indices are up smartly, gaining more than 1% each. The leading gainers include Capital Goods, Power and Bankex, which are up by as much as 2%-3%. Others like Realty, Metals and Auto are also trading higher by more than 2%.

Globally, investors are looking out for the outcome of the second day of the European summit. The other Asian markets are trading higher, with the Hang Seng, Nikkei and Shanghai in gains of 1%-2.5%. This is following Bloomberg reports that the European leaders, in their meeting in Brussels, agreed to ease repayment rules to Spanish banks and make it easier to recapitalise the region’s troubled lenders.

The European markets themselves are showing positivity in their early trades. The major indices like FTSE, CAC and DAX are currently higher in the range of 1.7%-3%. This is after a positive outcome from the first day of the European summit. Investors are hopeful that today too the leaders would take further steps to boost the Euro area’s growth and to help it come out of the debt crisis.

Back home, all the Index stocks continue to trade higher in the green zone. Leading index gainers include stocks like Tata Power, ICICI Bank, Jindal Steel, L&T, BHEL, etc. all trading higher by more than 3%. Other stocks like Cipla, SBI, Hero MotoCorp and Mahindra & Mahindra are trading with 2%-3% gains. HDFC and Tata Motors too are trading marginally in the green zone.

Dena Bank is up 2.38% at Rs 98.85. This was after the bank raised Lower Tier II Bonds (Series XI) capital funds to augment its long-term resources and meet its future Capital Adequacy Ratio requirements in the nature of promisory notes on Private Placement Basis for an amount of Rs 500.00 crores plus the Green Shoe option to retain Rs 350 crore. The bonds come with a coupon of 9.23% payable annually and are redeemable after 180 months from the deemed date of allotment, with a call option at the end of 120 months.

The market breadth, which indicates the overall health of the market, is strong. On the BSE, 1338 shares have gained, 1105 shares have declined and 130 shares remain unchanged.

The markets seem to be retaining their volatility with a positive bias.