Day Ends In Modest Gains, Euro Zone Eyed

The global sentiment turned positive with key data from China and Germany beating investors' expectations. This resulted in heavy gains seen across the global markets. However, the mood is slowly turning cautious as investors eye the developments in Europe. The Euro zone finance ministers are set to reconvene today after having failed to approve Greece’s latest tranche of aid last week.

Even with this uncertainty in play, Japanese stocks were higher on account of a weakening Yen, which has been under pressure from speculations of extended monetary policy easing. Following the market cues, the Sensex ended the day higher by 31.81 points (0.17%) at 18538.38 and Nifty closed up by 9.30 points (0.17%) at 5635.90.

Although there were modest gains seen in the broader indices, the BSE midcap and smallcap indices were up by a larger extent and closed higher by 0.96% and 0.79% respectively. The market breadth was positive, with 1566 (53.27%) advances and 1237 (42.07%) declines. Of the 13 sectoral indices, 4 ended the day negative. Among these, Banking and PSU were the highest losers, having dropped by 0.43% and 0.60% respectively.

The highest gaining indices were Teck and IT, which appreciated in value by 1.29% and 1.15% respectively. This gain in technology stocks was on account of a depreciating rupee, which is highly beneficial for the export-oriented sector. Of the companies in the sector, Hexaware Tech, Wipro and Oracle Financial Services gained 5.63%, 2.47% and 1.91% respectively.

Aviation stocks gained significantly today on speculations of stake sales. The stock prices of Jet Airways and SpiceJet saw an appreciation by 9.54% and 12.98% respectively.

The shares of Hindustan Copper plunged by 20% today, hitting the lower circuit as the government concluded its offer for sale at a price of Rs 157 per share, which is highly discounted as per investors.

Among the top gainers for the day were Sterlite Industries, Tata Steel and Infosys, gaining 2.23%, 1.96% and 1.71% respectively. Of the top losers were Mahindra & Mahindra, BHEL and Sun Pharma, losing 3.37%, 1.40% and 1.30% respectively.

We expect the direction of the global markets to become clearer once more the developments in Europe over the issue of Greek funding take better shape. Investors have their eyes fixed on Spain, after pro-independence parties in the region of Catalonia won a major victory in Sunday’s elections, which also contributed to the uncertainty. The track that the Indian markets are likely to take tomorrow would depend on how these factors act on a cumulative basis.