Sensex Closes 200 Points Up On Positive Cues From Europe

After opening on a flat, positive note, the Indian markets extended their gains in the afternoon session and went up sharply in the last few hours of the trading session. The Sensex closed with strong gains of more than 200 points, and Nifty closed down 70 points up.

A strong rebound in the European markets led today's rally. The markets in the region gained momentum after the Spanish government announced its plans to rescue the debt-ridden Spanish banks, as well as to help other countries like Italy. The region’s policy makers eased the repayment rules for Spanish banks and relaxed conditions for possible aid to Italy. We, at DSIJ, believe that this will give short-term momentum to the global markets, as the structural problems remain intact despite the bailout packages.

The other Asian markets, however, closed mostly in the negative zone. Hang Seng, Shanghai and Nikkei closed lower by -0.16%, 0.29% and 0.44% respectively. Weak global markets continues to weigh down the investors' sentiments.

Dow Jones Futures is currently trading 56 points or 0.44% up at 12741, indicating a positive sentiment in the US markets.

Back home, all the sectoral indices have closed with gains ranging from 0.62%-1.75% Among the major gainers, Capital Goods, FMCG and Auto were leading, up by 1.75%, 1.74% and 1.62% respectively. Auto stocks were up after the industry witnessed a strong rise in the auto sales numbers for Jun 2012.

Among the Sensex shares, Hindalco Industries, ITC, Jindal Steel, L&T, Maruti Suzuki, Sterlite and Tata Motors all closed down with over 2% gains. Overall, barring NTPC and Wipro, all the other shares were up between 0.15%-1.86%.

In individual stocks, IndusInd Bank closed with marginal losses after its quarterly results announcement. Alstom India gained today on the back of new orders worth Rs 26 crore from Tata Projects for the supply of coal grinding system for NMDC's Nagarnar blast furnace project.

We expect the markets to remain volatile  for tomorrow on the back of an uncertain global environment and persisting domestic issues.