Markets opened on a quiet note and moved higher, tracking recovery in the Asian indices taking Italy's credit rating cut by Standard & Poor's in stride. The Nifty was up 43 points, at 5,074 and the Sensex added 140 points, at 16,885.
Italy's credit rating was cut from A to A+, with a negative outlook due to the government debt which was the highest among the sovereign nations. raising concerns that Euro-zone nations may not be able to reduce their debt burden.
Most of the Asian markets recovered on Tuesday morning, except Japanese market. The Nikkei Stock Average was playing catch up after the three day weekend, the index slipped over 1%. The Hong Kong's Hang Seng index was flat, down 0.2% and the China's Shanghai Composite was up 0.4%.
In the United States overnight, President Barack Obama unveiled a plan to cut the debt by $3 trillion over the next decade by raising tax on the rich, which helped the Wall Street indices trim losses.
Back in India, there was an upward shift in Nifty options which may limit downside from the current levels. According Emkay Alternate Intelligence note, “Among Nifty September call options, maximum concentration witnessed an upward shift from 5200 strike to 5300 strike. Open interest increased by 0.57 million shares to 6.67 million shares.”
IT index was among the top gainers, shrugging of concerns in the Euro-zone. The index was advanced almost 2%; Infosys, Wipro and TCS rallied around 2% each.
Buying was seen in Consumer Durables shares also, the BSE Consumer Durables index was up 1.6%. Rajesh Exports gained over 3%, followed by Titan Industries, up 1.4% and Videocon Industries, up 1%.
From the broader markets, midcap and the smallcap indices were up around 0.5% each.
Among individual stocks Fortis Healthcare was up 1% this morning after company said that they have bought stake in Singapore’s Fortis International.
Top gainers on the Sensex were Jindal Steel, up almost 2%, followed by Tata Motors and Sun Pharma, up over 1% each. Among the losers, Maruti Suzuki fell over 1% each, and BHEL declined almost 0.7%.
Market breadth was negative, 468 stocks declined for 1068 stocks which advanced.