Markets Regain Momentum In Second Half

The Indian markets recovered smartly in the second half of the day. This was on the back of positive global cues coupled with CPI data, which came in at a slightly lower level. The broader indices closed higher by almost 0.5%, with the Sensex up by 80 points and Nifty higher by 24 points. Among the sectoral indices, Oil & Gas, FMCG, Healthcare and Consumer Durables were the only ones closing lower. Metals, Capital Goods, Auto and Realty were on the gainers list, helping the markets to recover from the day’s low.

The Consumer Price Index (CPI) figure for Jun 2012 has came in at 10.02%, which was lower as compared to that of 10.36% for May 2012. The WPI inflation data for Jun also stood lower, at 7.25% compared to 7.55% for May 2012. This data would be important for the RBI as it decides its monetary policy.

Hang Seng and Nikkei closed lower in the red today, while Shanghai closed in the green zone. The Chinese market closed higher after a Bloomberg report which stated that China’s new home prices in Jun 2012 rose in most of the cities tracked by the government in 11 months, as buyer sentiment improved after the central bank cut the interest rates.

The European markets are currently trading in the positive territory, with CAC, DAX and FTSE trading higher by 0.1%-0.7%. This is after report which said that lenders including the Credit Suisse Group AG have reported profits beating estimates, while the minutes showed that Bank of England may reconsider the case for an interest rate cut.

Dow Jones Futures is currently trading down 27 points or 0.21% at 12710, indicating a negative sentiment in the US markets.

Back home, Tata Power, Jindal Steel, Sterlite Industries and Maruti closed higher by over 2% in today’s trading session. Private banking majors ICICI Bank and HDFC Bank also closed higher by 1.58% and 0.66% respectively. Other stocks like HUL, M&M, Infosys and Bharti Airtel also closed marginally in the green.

On the other hand, Tata Motors closed 1.93% down at Rs 221.55. Other stocks that closed lower today were SBI, Cipla, RIL, GAIL India, Sun Pharma, all down in the range of 0.3%-1%.

In individual stocks, Dr Reddy’s Labs closed down by 1.85% at Rs 1672 following the announcement of the launch of Atorvastatin Calcium tablets. Cadila Healthcare closed 4.91% up at Rs 877.70 on the announcement that Zydus Urosciences has launched Udenafil, a next-gen therapy for erectile dysfunction for the first time in India.

Bajaj Auto was the leading index gainer, closed higher by 5.2% at Rs 1522.35. The company posted decent Jun 2012 quarter financial numbers, with a net profit of Rs 7183.90 million as compared to Rs 7110.60 million for the quarter ended June 30, 2011.

The market breadth, which indicates the overall health of the market, was positive for the day. Out of the 3260 stocks traded on the BSE, 1605 advanced, 1495 declined and 160 remained unchanged.

We expect the markets to continue with their volatility. The Presidential elections are slated for tomorrow, and following this, the street expects that the government may pass on some of the much-awaited reforms. This would further fuel growth in the economy, and would lead to positive sentiments on the streets.