Markets may close at record high today

Positive global cues and cracker of a listing of Coal India, seems to be a perfect Diwali gift today, as markets trrade close to record highs. Although, the intra-day highs are at bit distant, the Sensex and the Nifty are within touching distance of their respective closing hgihs.

The Sensex has touched a high of 20,878 so far, and is now at 20,856 - up 390 points (2%). The record closing high for the index is 20,873 achieved on January 1, 2008.

The NSE NIfty is up 110 points at 6,270.

"Nifty short term trend is positive till the time it sustains above 5950 levels. The reversal of the short term positive trend could be seen below these levels", Anandrathi said in a research report.

PSU stock, Coal India, debuted at a 19% premium at Rs 291 today. The issue price of the company was Rs 245 per share. The stock is now trading at Rs 336 and has reported trades of 162.34 million shares on the BSE.

Global markets ended in green. US markets edged up On Wednesday as the US Federal reserve decided to buy a large amount of government bonds to help the economy to recover. The Dow ended at 11,205 while S&P settled at 1,198. In Asia, Nikkei opened after a day's break and surged 2%. Hang Seng and Shanghai Composite rallied 1.5% each.

"In the near term, risk assets in general and EM equities including India in particular are likely to benefit from ample global liquidity and associated high risk appetite. Moreover, capital inflows will support India’s widening current account deficit. However, surge in capital inflows beyond the economy’s absorptive capacity will create fresh monetary policy challenges such as upward pressure on INR, which hurts the export sector. Second, the Fed action is likely to boost global commodity prices, which in turn may jeopardize the softening trend in domestic inflation. Third, excess capital inflows trigger sharp upward movement in asset prices in a short span, thereby increasing the risk of financial instability in the economy", says Edelweiss Reseach.

Food inlfation slipped for the third-straight week to 12.8% for the week ended October 23, government data reveled today. Prices of vegetables, especially potato and onion, softened due to improved supplies.

Buying activity was noticed in the Oil & gas space. The BSE oil & gas sector, led by RNRL and Reliance, has jumped 2.2% to 11,093. Other index gainers include Essar Oil, ONGC and Aban Offshore.

BSE metal, realty, bankex and auto indices have advanced 1-2% each.

Tata Motors is the biggest Sensex gainer - up 3.7% at Rs 1,230. Mahindra & Mahindra has added 2.5% to Rs 778.

Hindalco and SBI have added 3% each to Rs 225 and Rs 3,375, respectively. HDFC, DLF, ICICI Bank and Infosys are some of the other gainers and have gained over 1% each.

However, Hero Honda has slipped 1.3% to Rs 1,841. Bharti Airtel is down marginally at Rs 327.