The trend is up, unless Nifty closes below 6,000 on Monday

Following a 300-point rally in Dow Jones yesterday, both Sensex and Nifty opened strong on Friday and remained so throughout the day with steady volumes. Initially, after a strong opening, the markets dipped, but it picked up immediately and maintained strength. The Sensex and Nifty opened higher at 19,918 and 6104, respectively. After hitting a low of 20,368 and 6,046, both the indices moved gradually up to hit a high of 20,559 and 6,107. Sensex closed at 20,528 (up 255 points or 1.26%) while the Nifty closed at 6,096 (up 75 points or 1.25%).

Among the other indices on the NSE, the top five gainers were Bank Nifty (3.24%); IT (3.10%); Realty (2.83%); Service (2.26%) and Finance (2.22%). The top five losers were Metal (1.43%); Pharma (1.16%); FMCG (0.90%); Commodities (0.89%) and PSE (0.59%).

Of the 50 stocks on the Nifty, 27 ended in the green. The top five gainers were ICICI Bank (5.37%); Bank of Baroda (4.94%); Infosys (4.82%); LT (4.64%) and HCL Technologies (3.52%). While the top five losers were Coal India (down 4.03%); Hindalco (down 2.82%); NTPC (down 2.77%); Tata Power (down 2.63%) and Sun Pharma (down 2.30%).

The biggest news yoday was the earnings release of IT-bellwether Infosys. Its September quarter results were mixed. Its rupee-denominated revenues grew 31.5% but it was undone by net profits which grew just 1.6% in rupee terms. Its net profit in dollar terms declined 11.1%. Yet, the company issued positive forward guidance and expects its rupee-denominated revenues to grow 22% by March 2014.

Another factor that buoyed the markets was when market watchdog Securities Exchange Board of India (SEBI) issued guidelines to revive real estate investment trust (REITs) after it put it on the backburner in 2008. The guidelines will enable property companies to hive off assets as a separate listed entity. This way, they will be able to raise much needed capital. However, the draft rules propose that only companies with assets worth at least 10 billion rupees would be eligible to list particular assets of special purpose vehicles (SPVs). This caused property stocks to rally. The CNX Reality Index went up 2.83 %.

On the international scene, the continued US government shutdown took centre stage as President Barack Obama and the Republicans, led by House Speaker John Boehner, failed to come to an agreement in a meeting that lasted 90 minutes. Nevertheless, Obama expressed optimism at reaching a short-term deal which would raise debt-level ceiling which will avert a US default. The President insisted on lifting the shutdown as his priority and parties seemed to agree that a default would not be an option. Despite no deal, the markets remained buoyed on hopes that the option of default is off the table.

Asian markets were in the green with Shanghai Composite the leader, finishing the day up 1.70%. US futures were trading marginally higher and European indices too were trading positively.