Markets bounce back on late buying

The Indian markets witnessed a smart pull back in the last couple of hours led by buying in banking, health care and IT stocks

Major headlines

Inflation inches down to 8.58% in October

Shree Renuka Sugars FY10 consolidated net profit jumps three-fold; the stock closes 2.85% higher

Tata Motors global sales surge 18% in October, the stock ends 0.54% higher



Indian indices

Indian markets bounced back in today’s trade snapping three-day losing run. The markets witnessed a smart pull back in the last couple of hours led by buying in financial, technology, fast moving consumer goods and auto companies' shares. A short covering after a sell-off in the last week was another reason behind this bounce back. Easing of inflation also provided some respite to the markets, with the Nifty closing above 6100 levels.

Inflation for the month of October eased to 8.58% from 8.62% seen in September.

Banking, technology, fast moving consumer goods and select auto companies' shares were pushing the markets higher, along with Bharti Airtel, Cipla, Tata Steel, Bharat Heavy Electricals, Steel Authority of India and Dr Reddy's Laboratories. However, cement, power and Anil Dhirubhai Ambani Group (ADAG) companies' shares along with Reliance Industries, Housing Development Finance Corporation, Oil & Natural Gas Corporation, DLF, Reliance Communications, Ranbaxy Laboratories, Maruti Suzuki and Hindalco Industries were on the sellers' radar, which capped the gains to some extent. In Midcap space, MVL surged by 14.66%. Wockhardt, CMC, HMT (government will provide Rs127 crore to HMT) and Dewan Housing were up in the range of 5.4-11.5%. However, IVRCL Assets, Kwality Dairy, Novartis India, Eicher Motors and Triveni Engineering lost in the range of 5-6%.

The Sensex started the session 11 points higher at 20168. The index began to witness volatility in early trade. The Sensex hit the day’s low of 20046 in the morning trade tracking weak Asian markets. The index hovered between the negative and positive territory till the afternoon session. In the last hour of trade, the Sensex gathered some momentum and moved higher, hitting the day's high of 20335 as the European markets trimmed losses along with buying seen in banking, health care (HC) and information technology (IT) stocks.

At the finishing line, the Sensex closed at 20310, up by 153 points. The Nifty shut at 6122, up by 50 points.

Bonds and Rupee update: The Indian rupee opened at 44.92 per dollar versus 44.80. There is concern about the tight liquidity in the bond market. The ten-year yield is seen between 8.07-8.10%.

Market sentiment

The market breadth was unconstructive as losing stocks outnumbered the gaining ones. Out of the 3,105 stocks on the BSE, 1,685 slipped while 1,276 advanced. Hundred and forty-four stocks traded unchanged.

Sectoral and stock screening

Of the 13 sectoral indices on the BSE, nine rallied while the rest four posted losses. BSE Bankex was the best performer, shot up by 2.43%, followed by the BSE Health Care (HC) that surged by 1.07% and BSE IT gained by 0.86%. Rest of the gaining sectors were up in the range of 0.01% to 0.83%. On the other hand, BSE Realty and BSE Consumer Durables (CD) were down by 1.43% and 1.13% respectively. BSE Power and BSE Oil & Gas fell by 0.20% and 0.15% respectively.

Looking into 'A' group stocks, Syndicate Bank was the top gainer, up by 7.19%, followed by Federal Bank that surged by 5.32% and Mahindra & Mahindra Financial rose by 4.86%. Among losers, Hindustan Copper slid the most by 8.10%, followed by Pantaloon Retail that fell by 3.36% and Reliance Capital declined by 3.05%.

Viewing volumes

Sugar major - Shree Renuka Sugars was traded the most, with over 0.53 crore shares changing hands on the BSE, followed by industrial finance company - IFCI (0.45 crore shares), India’s second largest developer - Unitech (0.34 crore shares), PSU firm - Rashtriya Chemicals (0.30 crore shares) and public sector bank - IDBI Bank (0.30 crore shares).

Global signals

European shares edged higher as strong euro zone export growth overshadowed worries over the euro zone periphery's ability to manage its debt, with miners recovering from earlier losses.

The major Asian indices closed mixed. Indices like Nikkei, Shanghai Composite and Kospi ended the session in green, while Hang Seng, Straits Times and Jakarta Composite closed in red.

The US stock index futures point to a higher opening on the Wall Street. The investors will keep an eye on the October Retail Sales data.

Market Outlook: We have Retail Sales data to be announced in the US tonight.