Markets see biggest single-day gain in 2009 led by financials

Today's session was the strongest session for the benchmark indices in the year 2009. The markets continued their northward journey on the back of strong global cues. Short covering in rate sensitive and fresh long build up in major heavyweights boosted the markets higher.

The Nifty closed above the 2700 mark, after seven sessions while the Sensex ended above 8700 level, after eight sessions. Banking & financial, technology, metal, oil & gas and capital goods stocks led this rally followed by auto, realty and FMCG stocks.

The 30-share Sensex touched an intraday high of 8,793.21, before closing the day at 8,756.61, up 412.86 points or 4.95%. The 50-share NSE Nifty gained 101.80 points or 3.89%, to settle at 2,719.25, after hitting a high of 2726.15.

In an interview to CNBC-TV18, KV Kamath, Managing Director and Chief Executive Officer of ICICI Bank, said he sees recovery in the fourth quarter of the current financial year across sectors except in the textile industry. Kamath, also the president of industry body Confederation of Indian Industries (CII), said he was basing his assumption on the interaction with members of the CII National Council meeting.

Reliance Industries, Infosys, ICICI Bank, HDFC, L&T, HDFC Bank, SBI, ONGC, TCS, Tata Power, Bharti Airtel and Reliance Communication were leading contributors in this rally. However, only NTPC closed in red, was down 2%.

The Nifty March Futures ended with 1-point premium and added nearly 40 lakh shares in open interest (OI) with a turnover of close to Rs 9,900 crore. The Nifty Put-Call ratio was up to 1.35 from 1.25. Among stocks futures, DLF added about 46 lakh shares, SAIL added about 30 lakh, ICICI Bank added nearly 22 lakh and Reliance Capital added about 11.5 lakh shares in open interest.

This rally was mainly led by positive global cues. At the time of closing of Indian equities, European markets were trading higher. FTSE went up 62 points, to 3,774. CAC was trading at 2,744, up 50 points and DAX was trading at 3,999, up 43 points.

The US futures were trading with marginal gain; Dow Jones Futures were at 7,195, up 27 points and Nasdaq Futures at 1.166, up 3 points.

Asian markets ended higher; Nikkei 225 Average surged 5.15% and Straits Times was up 5.62%. Taiwan Weighted shot up 3% and Hang Seng gained 4.37%. However, Shanghai and Seoul Composite were up just 0.2% each.

Market outlook: Experts suggest caution till 2700 Nifty breaks

It was a lukewarm rally on Dalal Street as the stellar rally on Wall Street failed to lift traders' spirits. Mixed cues from the economy too didn't help. Inflation for the week-ended February 28 came in at 2.43% versus 3.03% week-on-week (WoW). This is the lowest inflation number since June 2002. The January Index of Industrial Production (IIP) number came in at -0.5% versus -0.6% in December 2008.



Markets closed in the green on the back of strong showing by autos and banks. Nifty closed at 2,617 up 44 points, while the Sensex shut shop at 8,343 up 183 points.

Amit Dalal, Amit Nalin Securities expects the Nifty to trade volatile till the 2,500 to 2,700 range is not broken. However, he was quick to add that it is not expected this week. Technical Analyst Ashwani Gujral feels there will be positive news once the Nifty crosses this zone and advises caution till then.

Experts outlook on markets

Amit Dalal, Amit Nalin Securities is of the view that a bear market rally has started in the US but sees a positive trend going on from here. “The markets have seen a huge sell-off in the last couple of months. They have covered a lot of ground and there is perhaps a case to be made out that fundamentals are improving. We have some kind of global positive scenario in the US markets. If that pans out in the next 15 days, then you might get a closing for this month higher than the F&O closing which you got last month.”



According to Dalal, emerging markets are not something that is looked at with the same way the US market is looked at. Therefore, there will not be same FII following. “One should look at what is the downside, why should the market go down another 500 points unless you see rampant selling taking place and right now I don’t see that many factors telling me the market should be 500 points lower than where we are right now.”



Dalal believes that markets are very volatile. The 2,500 to 2,700 range is still not broken, is bearing upon trader’s patience and will continue to do so until something substantially different happens which is not expected this week.

Ashwani Gujral, Technical Analyst sees the current market rally extending to 2,680 or 2,700. According to him, 2,700 to about 2,800 now is a huge congestion zone and once Nifty crosses this zone there will be positive news. He firmly believes that because of the elections markets may underperform even if there is a global rally. People need to be cautious till markets are below 2700, he added.

Source : Moneycontrol