Sensex climbs on global rally...IT stocks waltz

Just when one thought that self-belief and conviction were in short supply, comes another good session for the Indian equity markets. The benchmark stock indices seemed to find some momentum today, as bargain hunting was seen in IT stocks which have been beaten down in the recent collapse. Select Telecom, Capital Goods, Banking and Metal stocks were also in demand.The PSU index was the only one that closed in the red.

Finally, the BSE Sensex ended at 16,498 gaining 157 points. It had earlier touched a day's high of 16,549 and a day's low of 16,213. It opened at 16,447. The NSE Nifty closed at 4,946 adding 47 points.



Markets opened flat and slipped to a day's low in mid-morning trade on account of initial hiccups and weakness in the Banking stocks. However, the sentiment got a boost after Asian and European markets rallied, spurred by better-than-expected economic reports on manufacturing PMI for China as well as the eurozone.

Technically, the NSE Nifty has finally showed some sign of revival after a four week drubbing. The index has managed to rise for the second consecutive day and has also filled a gap which it had created on Friday, 19th August. The RSI also has completed a positive crossover and could rebound from the oversold zone, indicating strength in the markets.

However, one cannot neglect the fact that the FIIs continue to be net sellers in the Indian markets. So it would be wise to remain cautious.

"Earnings growth by India Inc. may not be scorching in the coming quarters given the moderation in the economy, elevated inflation, high borrowing costs and a global slowdown. But, along with China and a few other EMs, India is still a better place for investments even as the so-called "western" world is facing multiple problems.

Some uncertainties will surely prevail in the near term, especially on the external front. Q1 GDP data later this month and the RBI policy next month are a couple of important events to keep an aye on. Therefore, one needs to be very choosy and guarded. The F&O expiry on Thursday may make the the markets a bit more choppy," says Amar Ambani, Head of Research, IIFL - India Private Clients.