Good Friday On D-Street

It was a day of clean sweeps on D-Street, as the Indian markets had a good positive day with the broader market closing trades with handsome gains. Both Sensex and Nifty closed higher by almost 2.5%. Positive draft guidelines on GAAR coupled with some sense of confidence from the EU summit helped the markets move strongly northwards.

All the sectoral indices closed smartly in the green zone. The Capital Goods, Power and Bankex indices closed higher by more than 3%. Others like Realty, FMCG, IT and Auto also closed higher in the range of 1%-2%.

The peer Asian markets, Hang Seng, Nikkei and Shanghai also closed higher in the range of 1.2%-2.2% today. The markets were positive on cues from the European leaders' meeting in Brussels, in which they agreed to ease repayment rules to Spanish banks and make it easier to recapitalise the region’s troubled lenders.

European stocks continued the winning momentum that they gained in the early trades. Major indices like FTSE, CAC and DAX are trading with gains between 1%-2.2%. Yesterday, on the first day of the EU summit, the Euro leaders are reported to have agreed in principle on a "compact for growth and jobs", which would mean some stimulus for the zone. On day 2 of the summit today, investors are counting on further measures being taken to boost the Euro area’s growth and to aid its emergence from the debt crisis.

Dow Jones Futures is currently trading up by 115 points or 0.91% at 12641, indicating a positive sentiment in the US markets.

Back home, all the index stocks traded in the green today, except for Coal India, which closed the day 0.5% lower at Rs 346. Jindal Steel was the leading index gainer, with nearly 8.5% gains. Tata Power, BHEL, Sterlite Industries and ICICI Bank closed the day higher in the range of 4%-6%. Other stocks like HDFC, GAIL India, Bajaj Auto and Infosys closed trades higher in the range of 1%-2%.

L&T closed with almost 4% gains today, after the company announced that it has bagged orders worth Rs 2040 crore. 

Dena Bank also inched higher, closed the day up by 2% after the bank has raised Lower Tier II Bonds (Series XI) capital funds to augment its long-term resources and meet its future Capital Adequacy Ratio.

Alembic Pharma closed 2% higher after the announcement that it was named as a codefendant (along with Breckenridge) in a Paragraph IV ANDA litigation with Pfizer on Desvenlafaxine tablets.

The market breadth, which indicates the overall health of the market, was positive for today. Out of the 3302 stocks traded on the BSE, 2139 advanced, 1025 declined and 138 remained unchanged.

We expect the markets to persist with their volatile trends. They could move in either direction, and all eyes are on the European summit and its final outcome. The European Central Bank's meet next week could also provide significant direction. Further, the Jun 2012 quarter results season is expected to kick start by the end of next week, and the numbers could continue to be dismal. We advise our readers to exercise caution.