Markets ride on bargain hunting, global cues

The Indian markets broke six-day decline and closed with strong gains due to positive global cues and short covering in beaten down stocks.

Major headlines

November IIP at 2.7%

Tata Steel slips on concerns of dilution

Pfizer surges on good Q4 results



Indian indices

The Indian indices witnessed an extreme volatile session like yesterday, with a sudden upswing and a steep fall. Market movements did put a confusing picture as to how the things will pan out. Today’s session has been a complete turnaround for the markets. The sharp fall was led by disappointing index of industrial production (IIP) data for the month of November 2010, which came in at 2.7% versus 10.8% seen in the previous month. However, in the second half of the trade, the markets shrugged off the IIP news and erased all its losses helped by positive global cues. The rally was also led by the short covering in beaten down stocks and sectors. The markers closed the volatile session with strong gains, breaking six-day fall.

Among frontliners, Sterlite industries, Tata Motors, ICICI Bank, Tata Consultancy Services and Housing Development Finance Corporation rose in the range of 3-7%.

World-wide rally led the Sensex to begin higher by 153 points at 19353. The index was in the positive zone all throughout the morning trade. However, poor set of IIP numbers dragged the Sensex lower, hitting the day’s low of 19049. Later, the index shrugged off the IIP news and wiped out all its losses in the afternoon session as positive European markets lifted sentiments. The Sensex extended gains and hit the day's high of 19575 in late trade owing to strong buying in sectors and heavyweights.

The Sensex closed 338 points higher at 19534 and the Nifty shut at 5863, up by 109 points.

Market sentiment

The market breadth was in favour of advances, with 1,831 stocks rising and 1,050 declining. Hundred and thirty-eight stocks remained unchanged.

Sectoral & stock screening

All the sectors closed in the green barring BSE Capital Goods (CG) down by 0.18%. BSE Consumer Durables (CD) was the topper of the day, up by 4.64%, followed by BSE Realty up by 3.27% and BSE Metal rose by 2.80%.

In 'A' group stocks, the top three gainers were - Suzlon Energy up by 12.95%, Shree Renuka Sugars rose by 8.74% and Indiabulls Financial Services jumped by 8.64%. The top three losers were - Indian Oil Corporation slid by 2.92%, Coromandel International dropped by 2.66% and Torrent Power fell by 2.31%.

Viewing volumes

Wind turbine major - Suzlon Energy was traded the most, with 1.29 crore shares changing hands on the BSE, followed by India’s second largest developer - Unitech (0.64 crore shares), industrial finance company - IFCI (0.46 crore shares), sugar major - Shree Renuka Sugars (0.31 crore shares) and construction firm - Hindustan Construction Company (0.30 crore shares).

Global signals

The European shares rose to their highest in 28 month, with banks gaining, on expectations that a Portuguese bond auction will go well and help ease the country's debt crisis.

All the major Asian markets ended the session in the positive territory. Jakarta Composite was the top performer, up by 2.21%.

The US stock index futures point to a higher opening on the Wall Street.

Market outlook: In the US, we have import and export prices for December and also December's Federal Budget.