The Indian stock indices ended with smart gains after slipping late in Thursday's session due to F&O expiry. However, the main Indian stock indices came off their session highs in the afternoon trade due to choppiness in the European markets.
Today’s gap-up opening and early rally was triggered by favourable comments from ECB president Mario Draghi, who on Thursday pledged support for the common euro currency amid growing worries about the European credit crisis and its impact on the global economy. Draghi's remarks have set off speculation about fresh monetary easing measures from the ECB, including another round of LTRO. A couple of positive economic data out of the US also helped lift the glum mood across world markets.
The NSE Nifty, which had closed below the 200 DMA in the previous trading session, managed to end above the critical technical barrier. After a gap up opening, the Indian markets gained further ground before dropping below the 100-DMA level of 5,150.
At the end of it all, the BSE Sensex and the NSE Nifty managed to notch ~1% gain each. For the week both the indices are down ~2% apiece.
It looks like the key indices could remain stuck in a trading band of 4900 to 5300 in the near term. Stick to a stock centric strategy and stay vigilant.
The Sensex ended at 16,839, surging by 199 points or 1.2% over the previous close. It had earlier touched a day’s high of 16,975 and a day’s low of 16,760. It opened at 16,860.
The NSE Nifty settled at 5,099, up 57 points or 1.1%. It touched a day’s low of 5,077 and a day’s high of 5,150.
Sterlite Industries, Tata Steel, Tata Motors, HDFC Bank, Sesa Goa, ACC, Hindalco, TCS and ICICI Bank were the notable gainers on the Sensex and the Nifty today.
PNB, SBI, Bank of Baroda, JP Associates, Kotak Mahindra Bank, BHEL, DLF and Hero Motocorp were among the losers on the Nifty.
The INDIA VIX on NSE gained by 0.4% to close at 16.44. It hit a day’s high of 16.75 and a day’s low of 15.42.
The market breadth on the BSE was negative, with 1703 stocks ending lower and 1060 stocks closing higher.
The broader indices took it on the chin for the second day in a row, dragging down the overall market breadth. The BSE Mid-Cap index fell 0.9% while the BSE Small-Cap index slipped ~1%.
Among the BSE sectoral indices, PSU, Capital Goods and Realty were the only decliners with Realty losing the most, down 0.8%. Metals paced the gains, up 2.1%, followed by FMCG, IT, Teck and Auto. Pharma ended flat.
On the BSE-500, Era InfraEngineering, Tulip Telecom, MVL and Radico Khaitan were the top gainers.
Glodyne Technoserve, Parsvnath Developers, Deccan Chronicle, Sun TV Network, SpiceJet, Pipavav Defence, Union Bank of India, Puravankara Projects and Central Bank of India were the top losers on the BSE 500 index.
"Indian markets had another bad week amid a plethora of quarterly earnings, even as concerns prevailed over the precarious state of the eurozone and its negative fallout on the global economy. Lack of revival in southwest monsoon coupled with the Government’s constant dithering over pending reforms also dampened the sentiment. The persistent weakness in the rupee and FII outflows added to the jitters," said Amar Ambani, Head of Research, IIFL.
"The NSE Nifty is struggling to decisively cross its 200-DMA (~5,100). At the same time it seems to be getting some support at lower levels. It will be interesting to see the Nifty’s movement next week, as market participants focus on the RBI policy review," he added.
Globally, the Asian stock indices closed higher as ECB president Mario Draghi's encouraging comments in support of the euro sparked speculation about fresh monetary measures from the central bank to rein in the eurozone credit crisis.
The Dow Jones Industrial Average had its best day this month on Thursday following the comments by ECB President Draghi that the central bank will do whatever it takes to preserve the euro.
Draghi's pledge to preserve the euro has stoked expectations that the ECB may intervene in the bond markets of the struggling Eurozone members.
Japan's Nikkei Average advanced by 1.5%. The Kospi in South Korea was up 2.3% while the Hang Seng in hong Kong rallied 2%. The Nikkei was up 1.4% while Australia’s S&P/ASX 200 index rose 1.5%.
Taiwan’s Taiex jumped ~2% while China’s Shanghai Composite index reversed early gains to trade up 0.1%.
The intraday softening in the Indian market came after a reversal in the European indices. The European indices had opened with a positive bias earlier, underpinned by encouraging corporate results for banks, autos and the energy sector.
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