Sensex spurts on global rally...Nifty reclaims 5500

BSE Sensex ended at 18,314 adding 117 points. Nifty closed at 5,516 up 35 points.

The Indian equity markets ended the day with healthy gains, starting off the week on a high after US leaders announced they had reached an agreement to raise the nation's borrowing limit and avert a default. Markets in Asia and Europe welcomed the relief from the US on the critical issue of debt limit.





However, after opening on a strong footing, market sentiment took a bit of a jolt after the manufacturing PMI decelerated and the Chairman of the Prime Minister's Economic Advisory Council (PMEAC) warned about a possible fiscal slippage.



Finally, the BSE Sensex ended at 18,314 adding 117 points. It had earlier touched a day's high of 18,440 and a day's low of 18,219. It opened at 18,352. The NSE Nifty closed at 5,516 up 35 points.



Barring Tata Steel, Welcorp and NMDC all the components of the BSE Metals index ended with losses. In fact, the BSE Metal index today touched a 52-week low, hurt by steep losses in Jindal group of shares. JSW Steel was the biggest loser and hit a 52-week low.



The Supreme Court last week announced a ban on iron ore mining in Bellary and Karnataka Lokayukta's. Reports further indicted a few top companies for alleged malpractices in mining and exports of iron ore from the southern state.



Among the other major laggards were FMCG and Consumer Durables stocks. IT, Telecom and Auto stocks were among the major gainers.



Even the Mid-Cap and the Small-Cap stocks were under pressure.



"With a major cloud of uncertainty clearing out, global markets heaved a huge sigh of relief. However, it remains to be seen how long the euphoria on the US debt deal lasts. Global data today showed continued slowdown in the manufacturing space from Australia to eurozone. Lots of global data points will be on investors’ radar later in the week as well aside from policy meeting of central banks in Japan, UK, EU and Australia.



For the Indian markets, the catalysts will be corporate earnings and the parliament proceedings during the monsoon session. Any meaningful progress on any of the crucial reform-oriented bills will be sentimentally positive for the markets.," says Amar Ambani, Head of Research, IIFL - India Private Clients.