Yesterday's dismal market performance was made up for today, as the bourses gained steadily, encouraged by positive global cues.
During the afternoon trades, the Sensex touched its intra-day high of 18,444, while the Nifty scaled 5,535. However, at close, the markets pared some of their gains, but still advanced 1% each. The Sensex closed at 18,359 up 191 points, while the Nifty ended up 62 points at 5,511.
Both the benchmark indices opened at their lows this morning, although both were trading positive; the Sensex opened at 18,264, while the Nifty opened at 5,476.
Since the opening trades, the markets moved in a positive range, buoyed by a 5.7% rebound in Tokyo stocks, after a particularly shaky day yesterday, when the Nikkei closed down 11%, its lowest ever drop in 40 years.
Analysts said that the markets, in general, understood Japanese shares were oversold, but uncertainty over the Fukushima nuclear plant, which is on the brink of a meltdown, made market participants nervous. They also maintained yesterday's stock tumble was because of increased panick, and that the fall could not be attributed to fundamentals.
Several Tokyo shares gained on short-covering by hedge funds, and Asian markets received a boost from US stocks, which closed off the day's lows after assurances from the Federal Reserve that it would continue with its lose monetary policy to limit Japan-related losses, and to continue with the economy's growth traction.
Gainers on the Sensex were led by ADAG stock Reliance Infra, which moved up 5% at Rs 645, followed by banking heavyweights SBI at Rs 2,643 and ICICI Bank at Rs 1,027, both up 3%. ICICI Bank accounted for nearly 25% of the gains lodged on the Sensex, with the stock adding 43 points to the benchmark, followed by another banking stock SBI, which added 28 points to the total gain on the Sensex.
Losers on the benchmark were FMCG major Hindustan Unilever at Rs 271 down 1%, on lower advance tax payments for Q3FY11 as compared to the year ago period, while Hindalco Industries at Rs 203 and Cipla at Rs 296 were down 0.6% and 0.5% respectively.
The broader indices outperformed the benchmark, albeit marginally, with the Mid-cap touching 6,556 up 1.4%, and the Small-cap at 7,890 up 1.3%.
Mid-cap gainers were JM Financial at Rs 25 up 17%, Shree Global Tradefin at Rs 240 up 15% and Parsvnath Developers at Rs 38 up 11%.
Kolte Patil at Rs 47, IFB Industries at Rs 139 and Fame India at Rs 48 hit the upper circuit on the Small-cap index in closing trades, as all the stocks notched up handsome 20% gains.
Ahead of the RBI's policy review due tomorrow, rate-sensitives like Realty and Bankex led the gains as anticipations mount the RBI may increase key lending rates by 25 basis points. "The RBI’s rate hike could be in the range of 50-100bps during FY 2012 depending on the inflation numbers going forward. Credit demand remains strong, and IIP numbers have just started recovering. Hence, the RBI will not like to be over aggressive and hence market is unanimously factoring in 25bps rate hike. Consequently, a 50bps hike tomorrow could have a negative knee jerk reaction to the markets,” said Amisha Vora, MD, Prabhudas Lilladher, on her expectation from tomorrow's RBI policy meet.
The Realty index was at 2,105 up 2.5%, followed by the Bankex at 12,438 and the Consumer Durables index at 5,857 both up 2%.
In the realty space, Parsvnath Developers led the gains at Rs 38 up 11%, followed by Unitech at Rs 38 up 4% and Anant Raj Industries at Rs 77, also up 4%.
Banking stocks in the limelight were mid-sized Yes Bank at Rs 279 up 5%, followed by Canara Bank at Rs 634 up 4% and State Bank of India at Rs 2,643 up 3%.
Amongst consumer durable stocks, VIP Industries led the pack at Rs 645 up 9%, Whirlpool at Rs 245 up 5% and Titan Industries at Rs 3,541 up 2%.
The FMCG index was the laggard in trade, as it traded flat and languished at the bottom of the sectoral chart at 3,468.
Cement stocks were also in the news today, with many frontline cement stocks trading higher by 2-10%, on reports that the rebuilding of Japan will require large amounts of basic materials such as cement.
Amongst the notable gainers were ACC at Rs 1,023 up 2%, Ambuja Cement at Rs 130 up 4%, JK Lakshmi Cement up 2% at Rs 45, Andhra Cements up a whopping 10% at Rs 13 and Prism Cement at Rs 52 up a little over 2%.
Commenting on the current market scenario, Sandip Sabharwal, CEO-PMS, Prabhudas Lilladher, averred, "The effects, of the crisis in Japan, on India should be very limited and restricted to companies that source components and other parts out of Japan. Its impact could be more on the major trading partners of Japan. However, given the corrections in the global markets, this incident seems to have been well discounted now. Its long-term effects should be limited."
With 1,806 advancing stocks versus 1,064 declining stocks, the market breadth remained fairly positive today.
Major Asian indices closed in the green today, after yesterday's tremendous falls. Japan's Nikkei recovered well today, after yesterday's over-reaction to the crisis in the country; the index advanced 5.7% to close at 9,094. China's Shanghai Composite closed up 1.2% at 2,931, while the Hang Seng remained flat at 22,701.
Singapore's Straits Times at 2,971 closed up 0.9%, the Taiwan Weighted gained 1% at 8,325 and the Seoul Composite lodged a gain of nearly 2% at 1,958.
Markets in Europe were trading in the negative owing to heavy selling in banking stocks following a sovereign downgrade handed to Portugal's debt by Moody's, and concerns over Japan's nuclear crisis still looming large. Analysts in the West believe while yesterday's market movements were driven majorly by sentiment, investors would now start looking at the fundamentals to ascertain the damage caused to the markets by the current events in Japan and Libya.
The DAX was down 0.5% at 6,617, while the CAC 40 shed 1% at 3,742, and the FTSE 100 declined nearly 1% at 5,643.
