Momentum Builds, Markets Gain 1%

The Indian markets gained momentum after opening on a flat positive note. The Sensex and Nifty are currently trading higher by 1.02% and 1.01% respectively. Barring CD and Oil & Gas, all the sectoral indices have remained positive. IT, Teck and Auto are in the lead, up by 1.44%, 1.33% and 1.25%. Others like Realty, Bankex, Metals, FMCG, Capital Goods and PSU are also trading in gains of over 0.5% each.

Globally too, most of the markets are trading positive on the hope that Europe will take strong action to tackle its debt crisis and that the US and China may concede to stimulus measures to boost growth.

In Asia, the Hang Seng, Nikkei and Shanghai continued to trade positive, notching up gains of 0.18%, 0.87% and 0.05% respectively. Positive global cues have kept the markets higher. Also investors are waiting for the Jul 2012 data including industrial production, retail sales and inflation to come in on Thursday, Aug 9, as these figures will determine the requirement of stimulus measures to boost economic growth.

The European indices, opened on a subdued note but turned positive immediately, and are currently trading with marginal gains. The major indices, CAC, DAX and FTSE, are marginally higher in the range of 0.03%-0.42%. After a decent rally on Monday, investors are now looking look forward to the major upcoming events that will decide the market direction. A slew of economic releases are set for later this week, including the UK industrial output for June scheduled today and the US mortgage data expected on Wednesday.

Back home, the IT and Teck indices are witnessing a good trading session and driving the markets higher. Index heavyweights Infosys and TCS are up by 1.68% and 1.65% respectively. Other major gainers in IT are HCL Tech, Oracle Financial Services Software and Tech Mahindra, each trading higher by more than 1%. Auto stocks including Bajaj Auto, Bosch and Exide Industries are trading higher in the range of 1.73%-4%.

Among the Sensex gainers, Tata Motors continues to top the chart with 4% gains. The scrip has continued its rally, up by 7% in the last two days. Reliance Industries finally saw a 0.5% fall to Rs 784 on profit booking following the sharp upward move (5.71%) on Monday, Aug 6.

The market breadth continues to remain positive. On the BSE, 1394 shares have advanced, 1127 shares declined and 114 shares are unchanged.

We expect the markets to maintain their positive bias.