Markets Positive Post SEBI's Move

The Indian markets opened trades on a positive note today, and have slightly extended their morning gains by now. At present, both the broader indices are trading higher, with the Sensex up 128 points at 17784 and Nifty trading higher by 31 points at 5394. It seems that the capital markets regulator SEBI’s measures taken yesterday after market hours have spread some kind of optimism on the streets.

Among the sectoral indices, FMCG, which was beaten down heavily yesterday, is in leading gains of 1.44% today. Others like Auto, IT and Consumer Durables are also trading higher in the green zone. Only Realty and Capital Goods are trading in the negative territory, down by 0.15% and 0.41% respectively.

The other Asian markets continue to trade on a mixed note, with the Hang Seng and Nikkei up by 0.55% and 0.87% respectively and the Shanghai down by 0.10%. Media reports say that the Asian markets are taking positive cues from the US as well as from the Germany’s chancellor's comments on easing the Euro zone's debt worries. The Japanese stocks got an extra lift from a falling Yen.

Back home, FMCG heavyweights HUL and ITC are trading higher by 1.76% and 1.41% respectively. Investors are seeing some buying opportunity in these stocks, which were beaten down heavily in yesterday’s trade. Auto stocks are also accelerating, with Tata Motors and Mahindra & Mahindra in the lead, higher by 2.57% and 1.63% respectively. Other stocks like Jindal Steel, HDFC, Infosys, ICICI Bank, etc. are trading higher by over 1% each.

On the other hand, Capital Goods heavyweight L&T is the leading index loser, lower by 1.02% to Rs 1459.45. Other stocks like BHEL, Tata Steel, HDFC Bank and Bajaj Auto are also trading in the red.

Sterlite Industries is trading 0.77% lower at Rs 108.90 after media reports which said that NSE would replace the company with UltraTech Cement in the Nifty 50 with effect from Sep 28, 2012.

Further, Maruti Suzuki is trading higher by 1.2% at Rs 1186.45. The company has announced part reopening of its Manesar plant effective from Tuesday, Aug 21, 2012. It would start producing 150 cars a day, which is a tenth of the production capacity of the plant.

The market breadth, which indicates the overall health of the market, is strong at the moment. On the BSE, 1471 shares advanced, 820 shares have declined and 113 shares are unchanged.

We expect the markets to remain to remain volatile for the day with a positive bias.