Markets Up 0.4%, Cipla Top Gainer

The Indian markets showed some strength after the Foreign Ministry of Mauritius said that India has assured the country that its economic interests will not be harmed. The Mauritian Foreign Ministry also said that they have made offers to India pertaining to tax treaty revision. The meeting of the joint working group has been announced on Aug 27-28, 2012.

The Asian indices, which were up earlier turned into negatives for the rest of the day. While Hang Seng managed to close in the green, Shanghai and Nikkei were both down by 1.18% and 0.27% respectively. The indices were under pressure as the markets awaited the ECB's verdict.

The European indices have largely curbed their negativity. FTSE and DAX have turned positive, while CAC is trading flat to yesterday's closing. Later today, Bank of England and the ECB will announce their decision with respect to easing the monetary policy.

The US is also slated to announce its job claims data today and its unemployment data tomorrow, which will show if the job creation process has picked in the country.

Meanwhile, the Emerging Asia Economics Update report has said that India's problems are self inflicted, mainly resulting from policy paralysis and the absence of reforms. It also said that the situation would not improve until 2014. With elections coming up in the next two years, the report believes that the policy inaction will get worse.

On the sectoral front, FMCG was the top gainer after news that the government will allow FDI in multi-brand retail. Bankex was in gains by 1% on expectations of a rate cut. The Power, CG, Auto and HC indices were also up from their morning lows. Metals and Realty, on the other hand, lost 0.5% each. The other indices remained mostly flat.

Among the Sensex stocks, Cipla was the top gainer with 2.87% gains. ICICI Bank, the largest private sector lender, gained 2%. Tata Motors was also in the gainers list. ITC, Maruti and BHEL were up 1.5% each. The shares of ONGC, though, lost 2%. The other drug maker, Dr. Reddy’s Labs, lost 0.8%. Bajaj Auto, Coal India, Sterlite Industries and Bharti Airtel were also all down.

The debt-ridden and troubled telecom company, Reliance Communications, has informed the stock exchange that it has filed a preliminary prospectus for an IPO in Singapore. The shares of the company were up by 2.69% at closing time.

The shares of Kingfisher showed some strength after the company said that its lenders have not started the process of selling its properties.

Overall, the markets did not receive any significant direction on either side. The shares of the Bajaj Group companies, Biocon and J&K Bank all came down as they became ex-dividend today.

The advance-decline ratio on the BSE remained highly positive, as for every 1 stock that declined, 2 stocks advanced. A total of 3% stocks remained unchanged.

Ahead from here, the course of the market will mainly be decided by the decision of BoE and the ECB. Investors should pay keen attention to the news from Europe as well as to commentary from the bank on the rationale behind its decision.