Green Friday!

After a positive opening, the Indian markets held their gains for the day and managed to close with nearly 1% gains. Though the gains were trimmed by about 25 basis points, the markets outperformed their peer global indices except for the Shanghai index. Nifty touched the 5700 mark on the last day of the week.

Optimism was seen in the world markets after a debt-ridden Spain announced it budget focussing on spending cuts despite the violent public agitation. Yesterday, the US GDP data showed a contraction in the economy, due to which the US markets may shed a few points. In fact, the European markets have already started showing signs of weakness, as the CAC has turned red and DAX has shed a few points after a positive opening. Dow Jones Futures is currently trading with 0.12% gains, while the S&P 500 Futures is in the red.

Among the Asian indices, Nikkei closed with around 1% losses on reports that the dollar depreciation will impact the country's exports. The Shanghai markets, however, were up by 1.43% by closing, outperforming all the world indices. Yesterday, the People's Bank Of China pumped a record amount of liquidity into the banking system, which has kept the stocks in gains today.

In the Indian equity markets, all the indices except for Realty traded in the green. Auto was the major gainer. Consumer Durables was also 1.68% up ahead of the festive season. Healthcare stocks rebounded towards the end of the day on reports that the new pharma pricing policy will not impact the companies significantly. The Capital Goods index was flat at closing, while Realty closed down.

Of the Sensex stocks, Infosys, BHEL, SBI, GAIL India and HDFC Bank closed in losses. The sentiment in the market was so bullish that at one time all the 30 stocks were in gains. Metals and Mining company Hindalco was the top gainer with 3.3% gains. Tata Motors was up by 3% today. The shares of Cipla and Sun Pharma gained 2.5% each, while those of Dr. Reddy’s were up 1.5%. Tata Power, NTPC and ITC all gained over 1%.

Among others, Tata Global shot up 8% on news that global coffee shop leader Starbucks is set to open its first café in India. The shares of Indian Hotels gained 6% as its hotel Taj Mansingh has received respite for a year before it is auctioned. Cement stocks Shree Cement and ACC were also significantly up. The state-owned PTC India and Power Grid Corp were higher by 3% each as the debt restructuring of the SEBs will help them to grow their businesses. Max India has seen growth in this week over news that the government will raise the FDI cap in the insurance sector.

The advance-decline ratio remained very positive in today’s market, with over 56% stocks advancing. In fact, on the BSE 500 index, two stocks gained for every one that declined.

Overall, it has been a very positive day for investors, led by strong international cues. As we move ahead, further announcements from the government on the reforms front will keep the markets in gains. In the international market, however, the bad news flow will continue.