Indian Markets close in green after recent fall - Alex Mathews

After opening in red, the Nifty made a base today and moved up from there till noon. Later in the second part of the day we saw a sideways trending market to finally close in green holding on to the gains. The market breadth, indicating the health of the market, was negative. On BSE, 1,612 shares declined while 1,159 shares advanced. A total of 138 shares remained unchanged. During the day we saw the food inflation numbers which was at 9.13% against 8.96% previously. On the other hand the fuel price index moved to 12.84% against 12.62% previously. Rising food inflation along with below normal monsoons is increasing the possibility of rise in food price and rise in input cost for FMCG sector. This can affect the government's efforts to bring down the inflation within the comfort level. Also there were reports that the government will raise diesel, cooking gas and kerosene prices next month to help the Oil marketing companies to ease their liquidity crunch.

Nifty had a good session but not yet given a buy indication. This can only be considered as a pullback rally after the recent steep fall. The overall sentiment in the domestic market and what we are seeing across the border is not supporting an uptrend. Nifty is having support around 5245 and 5171 levels.

On the sectoral front, we saw the IT stock making gains on NASSCOM's reports that the demand for outsourcing services remains strong. Wipro, TCS, HCL Tech and Infosys moved up on the back of this report. Stocks like BPCL, HPCL, IOC etc gained on news on diesel price hike next month. FMCG and consumer durable stocks witnessed renewed buying. Stocks in airline space like Jet airways, Spicejet, KFA etc moved on reports that the domestic air traffic in January-May 2011 rose 17.6%. Tea stocks like McLeod Russell, Jayshree tea and Harrison Malayalam gained today and are expected to move up further. Metal price slipped after Federal Reserve cut the growth and employment forecast indicating at weakening economy leading to fall in metal stocks.

Asian market including Hang Seng and Nikkei fell tracking US markets which had slipped after Federal Reserve lowered its economic growth forecast and hinted at completing a $600 billion bond purchase program this month. European markets too were in red today as the French Manufacturing PMI slipped to 52.5 against 54.9 and German PMI slipped to 54.9 against 57.7. In US later in the day we are expecting the initial jobless claims, new home sales, consumer confidence data etc which will keep the markets alive.

Source : Equity Bulls

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