Markets rebounded in opening trades and were trading firm, taking cues from their Asian peers, as investors flocked to the beaten-down IT stocks. The Nifty reclaimed 5K and was hovering around 5,004, up 58 points and the Sensex was at 16,670, up 190 points.
-------------------------Updated at 09:50 hours
In Asia, markets were trading on a mixed note on Tuesday morning over expectations that China will buy Italy's bonds and provide some relief to the European economic situation. The Nikkei was up 0.4%, at 8,572 and the Strait Times advanced 0.7%. However, Shanghai Composite was trading in the negative zone, down over 1%, as markets played catch-up after remaining shut for the three-day weekend. South Korea’s Kospi was shut for the Chusok holiday, while Hong Kong’s markets were shut for the Mid-Autumn Festival.
On Monday, the Indian markets took a pounding as the industrial output data was below expectations at 3.3% in July against 6.2% median forecast. While the markets clawed back in opening trades, analysts said the gains may be limited as inflation for the month of August may remain close to double digits, prompting the Reserve Bank of India to hike rates further during the monetary policy review on Friday.
Foreign institutional investors were net sellers of Rs 934 crore in cash on Monday, while the domestic institutional investors bought shares worth Rs 428 crore.
European debt crisis may continue to hang like a sword on Indian markets. A renowned global investor and the author of The Gloom, Boom and Doom report, Marc Faber in an exclusive interview to Business Standard said, the stock markets around the world went up because of money printing and support in 2009, the next crisis will be worse than 2008. The Indian markets may drop to 12,000-15,000 levels, which would be a good level to buy into the market.
IT shares, which bore the brunt off selloff yesterday, were the first to recover as investors picked up battered stocks. BSE IT index was the top gainer, up 2.2%. Financial Technologies added 3%, TCS and Infosys climbed up 2% each.
Realty shares were also on a firm ground, the index was up 1.7%. Top gainers were Oberoi Realty, up 3.1%, HDIL added 2.7% and Indiabulls Real Estate was up 2.4%.
Among the heavyweights, Infosys, ICICI Bank and Reliance Industries advanced 60 points on the Sensex. Sun Pharma, Hindustan Unilever and ONGC were only losers, down 0.6-0.8% each.
From the broader markets, midcap and the smallcap indices were up over 1% each.
The market breadth was positive, 364 stocks declined for 1127 stocks which advanced.