Daily Market View:Expect a range-bound market

The market may be headed higher but the climb will be slow

The market extended its gains for the third day in a row on positive global cues and short covering. The splendid close by Wall Street overnight saw markets in Asia opening in the green this morning, buoying investor sentiments back home.

However, a high degree of choppiness kept trades range-bound for most of the day. The broader indices outperformed the benchmarks today with help from realty, metal, FMCG and auto stocks.

The Sensex finally closed at 16,863.06, up 196.66 points (1.18%) while the Nifty ended higher by 63.45 points (1.27%) at 5,066.55, above the 5,000-levels for the second day.

Markets in Asia mostly ended in the green as Wall Street ended on a strong note overnight aided by strong economic data. China stating that it would not distance itself from European sovereign debt securities also supported the upmove.

The Hang Seng rose 335.34 points (1.73%) to 19,766.71; the Nikkei 225 surged 123.26 points (1.28%) to 9,762.98; the Seoul Composite jumped 15.28 points (0.95%) to 1,622.78 and the Taiwan Weighted added 52.16 points (0.72%) to 7,295.32.

The Shanghai Composite was down 0.15 points (0.01%) to 2,655.77. 

US markets surged on Thursday taking cues from the drop in weekly jobless claims and an increase in demand for durable goods last month. The Dow gained 284.54 points (2.85%) to settle at 10,258.99. The Nasdaq added 81.80 points (3.73%) to close at 2,277.68 while the S&P 500 advanced 35.11 points (3.29%) to end at 1,103.06.

India’s food inflation eased to 16.23% for the week ended 15th May on account of a fall in prices of masur, fruits and vegetables. Inflation declined by 0.26 percentage point from 16.49% in the previous week.

The fall was mainly owing to a 4% slide in masur prices, 2% fall in prices of fruits and vegetable each, and 0.20 % decline in prices of cereals and pulses over the week. Non-food articles also saw a decline in prices. Cotton seed prices fell 2% and raw rubber and mustard seed fell by 1% each.

The index for food articles declined marginally by 0.1% to 293.6 from 293.9 in the previous week. The index for broader primary articles group with a weight of 22.02% in the overall wholesale price index (WPI) declined by 0.1% to 298.9 while the index for fuel, power, light and lubricants with a weight of 14.23% in the overall WPI increased slightly to 365.5.

The monsoon is expected to hit the Indian coast in early June. The Indian Meteorological Department (IMD) expects the monsoon to be 98% normal this year, after a poor showing last year that hit crop output and fuelled rise in food prices.

The top gainers on the Sensex were led by Reliance Communications (RCom) up 5.93%, Sterlite Industries (up 5.75%), Jindal Steel (up 4.85%), DLF (up 3.53%) and Mahindra & Mahindra (up 3.09%).

Among the trailers, Maruti Suzuki was down 0.78%, HDFC Bank was down 0.35% and L&T was down 0.20%.

All the BSE sectoral indices, once again, closed on a positive note. Realty was up 3.92%, metal was up 3.54%, FMCG was up 2.34%, auto was up 1.47% and power was up 1.42%.

Reliance Industries Limited (RIL) today announced its fifth oil discovery in exploration block CB-ONN-2003/1 (CB 10 A&B) located in the Cambay basin, at a distance of around 130 km from Ahmedabad in Gujarat. The block was awarded under the fifth round of the New Exploration Licensing Policy (NELPV).

This discovery, named ‘Dhirubhai-48’, the fifth oil discovery in the block so far, has been notified to the government of India and to the Directorate General of Hydrocarbons (DGH). The potential commercial interest of the discovery is being ascertained through more data-gathering and analysis.

The top performers on the Nifty were Sterlite Industries (up 5.81%), RCom (up 5.53%), Jindal Steel (up 5.23%), Suzlon Energy (up 4.99%) and Ranbaxy (up 3.37%).

The top losers on the benchmark were Bharat Petroleum (down 1.53%), GAIL India (down 1.14%), Maruti Suzuki (down 1.06%), Ambuja Cement (down 1.01%) and IDFC (down 0.58%).

Foreign institutional investors (FIIs) were net sellers in the equity segment on Thursday, offloading stocks worth Rs533.07 crore while domestic institutional investors (DIIs) were net buyers of stocks worth Rs410.44 crore. The rupee extended its gains on Friday as the dollar was weak against most other currencies. Gains in the domestic equity market also supported the local currency.

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