Realty Rises, Markets Close In Gains

The Indian markets remained in a narrow range throughout the day, but ended with good gains. Both the broader indices closed higher by almost 0.50%. Buying was seen in some of the stocks that were beaten down quite heavily in the past few trading sessions. All the sector indices closed higher except for Auto, which closed marginally down by 0.12%. Realty zoomed up by 2.41%, helping the markets to close in the positive territory. Capital Goods, Consumer Durables and Power also closed in the green zone.

Earlier, the Asian markets closed in the negative territory, with the Hang Seng and Nikkei down by 0.27% and 0.07% respectively. Shanghai plunged by 1.51% to the 2136 levels after media reports of China's trade surplus narrowing to US$ 25.1 billion in Jul 2012 from US$ 31.7 billion in Jun and expectations that it would continue to narrow in Aug, as export growth is likely to stay weak. The markets were also weighed down by Japan’s below-forecast economic growth (at an annualised 1.4%) in the Jun quarter.

The European markets continued to trade on a quiet note, with the FTSE trading marginally down by 0.05%. CAC and DAX are trading 0.12% and 0.01% up respectively after stocks in the banking and utilities sector showed some kind of strength.

Dow Jones Futures is currently trading 6 points or 0.04% down at 13166, indicating a negative sentiment.

Back home, HDFC moved up smartly in the second half of the trading session, and ended as the leading index gainer, up 3.71% to Rs 715.35. Other stocks like Sterlite Industries, Maruti Suzuki, Bajaj Auto and BHEL closed higher by over 1.50%, while Cipla, NTPC, M&M, Infosys, etc. closed marginally in gains.

Tata Motors remained the leading index loser, down by 1.55% to Rs 228.40. Further, HUL, Hero MotoCorp, Hindalco and Tata Steel ended the day's trade over 1% down. Stocks like Dr Reddy’s, Coal India, ITC and ICICI Bank also closed lower in the red.

Pfizer closed 3.03% higher at Rs 1279.90. Business Standard reported that the pharma manufacturer's net profits soared by 700% to Rs 329 crore for the quarter ended Jun 2012 against Rs 41.2 crore in the same period a year ago. India Cements closed 0.47% down at Rs 85.15 on reports that the company may sell its stake in Jagati Publications, which is owned by Y Jagan Mohan Reddy. The company had earlier sold its stake in Bharati Cements, which was owned by the same group, and made a profit of around Rs 35 crore.

The market breadth, which indicates the overall health of the market, was positive for the day. Out of the 3205 stocks traded on the BSE, 1714 advanced, 1367 declined and 124 were unchanged.

For tomorrow, we have some of the major companies declaring their quarterly results, which could mean stock-specific movement. Watch out for stocks like Deccan Chronicle, Finolex Cables, Gammon India, Jain Irrigation, IDFC, Videocon, MMTC, Hindalco, HDIL, Unitech, Reliance Infra, Reliance Power and Shree Renuka Sugar.

We expect that the markets will remain volatile tomorrow. The Wholesale Price Index (WPI) inflation numbers for Jul 2012 is slated to be released tomorrow, and could take the markets in either direction.