Markets ignore Fitch hitch; Sensex gains 153 pts

The Indian markets witnessed volatility today and closed the trade in the positive terrain. The Sensex was up by 154 points while the Nifty surged 40 points. Headlines for the day: RCom hits 52-week low on downgrade by Veritas Rupee slips 12 paise at 56.05 dollar Yellow metal hits record of Rs30,428 per 10 gm today Cement stocks rise ahead of cartelisation report\ Indian Indices: The Indian markets rebounded in trade today recovering from the disappointment over Reserve Bank's decision to not cut rates yesterday. Investors also overlooked the downward revision of India's rating outlook by Fitch. Markets witnessed highly volatile swings owing to news flow and shut shop in green. It was a trend reversal day with the markets turning tables on positive cues. The markets today rang the opening bell in positive led by mixed Asian peers and backed by positive signals from SGX Nifty. Positive European cues also aided to the sentiments. However, as the rupee depreciated to 56.07 per dollar the markets fell and registered their respective intraday lows. Sensex registered a low at 16,681.89 and Nifty fell to 5,048.10. Post that, the markets switched and rose a little higher as the European markets opened in green. Further trade sentiments improved on the back of Prime Minister Manmohan Singh’s comment at the G20 Plenary Session which stated that the Indian government is taking steps to revive investor sentiment. Markets gained momentum and registered their respective highs near the close of trade. Sensex moved up to 16,890 and Nifty rose to 5,110.20. Major heavyweight supporters were – Reliance Industries, ITC, ICICI Bank, TCS, ONGC, HDFC Bank and Bharti Airtel. Overall, it was a volatile session for the day. From the stock specific action front, Reliance Communications (RCom) tanked after Veritas downgraded the stock to sell and cut its price target to Rs15 as against the current market price of Rs62 a share. At the end of the day, the stock closed 2.46% lower. From the IT sector, the second largest software service exporter Infosys dropped on reports that the company may reduce its guidance due to currency volatility. The stock fell 1.29% in trade today. The shares of oil marketing companies (OMCs) also remained in focus on expectations of partial decontrol in diesel price and increase of regulated products price. HPCL, IOC and BPCL gained in the range of 1-3% in trade today. On the other hand, Cement stocks plunged ahead of a likely report on cartelisation today (June 19, 2012). ACC ended up by 0.47%, India Cement up by 0.81%, Ultratech Cement up by 0.11% while Ambuja Cement ended up by 2.83%. From the aviation sector, Kingfisher Airlines and Jet Airways were down today, on the reports that domestic carriers have cut airfares by 5-20% after being pressured from the regulator. On the sectoral front, banking stocks extended fall for the second consecutive session today (June 19, 2012) after the RBI left policy rates and CRR unchanged yesterday. Country's largest lender State Bank of India ended up by 0.74% while its rival ICICI Bank was up by 1.19% and HDFC Bank ended up by 0.77%. Market sentiment The market breadth stood in favor of advances. Of the 2806 stocks traded on the BSE, 1350 (48.11%) rose, 1321 (47.08%) fell and 135 (4.81%) stocks remained unchanged. Sectoral & stock screening All the 13 sectoral indices closed positive, except BSE IT which was down by 0.09%. Top Gainers: BSE Oil & Gas (up by 2.14%), BSE FMCG (rose by 1.58%), BSE HC (gained by 1.13%). Among 'A' group stocks, top three gainers were- HPCL (rose by 6.36%), Strides Arco (up by 5.42%) and Financial Tech (surged by 4.46%). Top three losers were- Godrej Ind (down by 3.15%), Sesa Goa (declined by 3.01%), and Tata Comm (fell by 2.72%). Global signals: The euro fell briefly versus the dollar and European stocks slipped on Tuesday after the German ZEW economic sentiment index dropped sharply on concerns about Spanish bank woes and Greek's political instability. From Asian markets Japan's Nikkei share average retreated today from yesterday's four-week high as the initially positive reception for Greece's election result was chilled by concerns about Spain's banking sector. US stock index futures pointed towards a mixed opening at the Wall Street on Tuesday. Market Outlook: Data to be released in the US on Tuesday: Housing Starts