Monday, July 25, 2011

Morning Note - Market Insight By Mansukh - 25th July, 2011

On Friday 23 July 2011,Joining the global rally, the Indian equity markets snapped their two day's declining trend and showcased an awe-inspiring performance on the last trading day of the week, after euro zone leaders finally struck a bailout deal for Greece, easing concerns the region's debt crisis may spread and threaten global growth. Though across the board buying sent the benchmark indices sparkling above their respective psychological level of 18600 (Sensex) and 5600 (Nifty), however, some of the market men trimmed some of their position in the afternoon deals in order to avert the volatility surrounding the coming week. Since two big trigger's i.e. RBI's monetary policy review and the F&O series expiry are scheduled next week and would decide the movement of the bourses. The street widely expects at least a 25 basis point rate hike by RBI in its policy meet, given the clambering monthly inflation data. However, the expectation that the RBI is nearing the end to its anti inflationary stance, gave the market again a reason to rejoice. The anticipation that the RBI would not go for another rate hike post the monetary policy review on July 26,2011 mainly sent the banking stocks soaring high as the banking index was the top gainer twinkling with the gain of over 2%. On the global front, US stocks climbed on Thursday as signs of progress on the US debt talks and concrete action from Europe on its own debt crisis heartened investors. European shares rose on Friday and were on track for a fourth straight session of gains, led by banks after a new rescue package was agreed for Greece. The second bailout for Greece, announced on Thursday, included 109 billion euros of EU government money and a contribution by private sector bondholders estimated to be as much as 50 billion euros by mid-2014.

The BSE Sensex gained 282.68 points or 1.53% and settled at 18,718.87. The index touched a high and a low of 18,747.06 and 18,533.43 respectively. 27 stocks advanced against 3 declining ones on the index. The BSE Mid-cap index gain 1.29% while Small-cap index was up 0.79%. On the BSE Sectoral front, Bankex up 2.21%, TECk up 1.96%, Capital Goods up 1.77%, Auto up 1.69% and IT up 1.44% were the top gainers. On the flip side, Consumer Durables down 0.61% was the only losers

India VIX,a gauage for market's short term expectation of volatility lost 4.48% at 17.91 from its previous close of 18.75 on Thursday. The S&P CNX Nifty gained 92.05 points or 1.66% to settle at 5,633.65. The index touched high and low of 5,642.20 and 5,567.10 respectively. 42 stocks advanced against 2 declining ones on the index. (Provisional)

All the Asian equity indices barring KLSE Composite finished the day's trade in the positive terrain on last trading day of the week after euro-zone leaders finally struck a second bailout deal for Greece that also puts in place steps to avoid contagion in other struggling economies.. Moreover Japanese Nikkei surged over a percent in the trade, led by banks that leapt after Morgan Stanley's strong results and euro-sensitive issues such as Canon, up on the euro's gains after officials agreed on steps to solve Greece's debt woes.


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