Markets reverse six-day losing streak

Taking cues from the overseas markets, the Sensex opened with a positive gap of nearly 400 points at 17,245. The Sensex moved a wee bit higher to 17,256, thereafter, the index pared some gains on account of profit taking in select stocks. The Sensex touched a low of 17,022, but soon bounced back to higher levels.

Eventually, it was controlled aggression by the bulls, which saw the markets sustain gains for most part of the day. Although the US markets ended with gains of around 5-6 per cent each, our markets did not see all-out buying, but on the positive side, did neither see fresh weakness.

The Sensex finally settled with a gain of 273 points at 17,130. The NSE Nifty added 88 points to 5,161. In the process, the markets reversed its six-day losing streak, wherein the BSE benchmark index had shed around 1,450-odd points.

In Europe, CAC slipped into the red after a positive opening. DAX and FTSE were also off their morning highs. Riots in London, which is now in its fourth day, dampened sentiments in European markets. However, the indices recovered to morning levels. CAC was up 1%, DAX gained 2%.

Global markets rose this morning, following Wall Street gains after the US Federal Reserve pledged to keep US interest rates low at least through mid-2013. US is the world's largest economy. In Asia, Hang Seng jumped 2.3% to 19,783. Nikkei was up 1%. Taiwan Weighted stole the show with 3% gains.

BSE auto index was the biggest sectoral gainer and added 4% at 8,636.

Tata Motors was the biggest gainer among Sensex stocks - up 6% at Rs 844. Maruti Suzuki, Mahindra & Mahindra and Bajaj Auto from the auto space, followed with 4-5% gains.

However, according to recent data, the domestic passenger car sales declined by 16% to 133,747 units in July, 2011, from 158,767 units in the same month last year. On the other hand, two-wheeler sales increased by 13% to 1,056,906 units last month from 938,514 units in July, 2010.

IT heavyweights staged a smart comeback today after the recent slide following S&P's US downgrade. The index ended up 2.4% at 5,163. Heavyweights, Wipro and Infosys gained over 2-3% each. Patni Computers, HCL Tech, TCS and MphasiS jumped 2% each.

"IT sector is looking bearish in the mediun term out look and would suggest sell on rallies as the mometum indicators have give fresh sell signals on the weekly and monthly charts," said Somil Mehta, Sr Technical Analyst (Equity), Sharekhan.

Other interest rate sensitive sectors - realty and banking - were up 2-3% each. Metal stocks also moved up.

Fertiliser stocks rose as India eyed stake in Belaruskali - one of the world's largest producers of potash. The deal will help India to ensure long-term suppliers of fertilizers to cope with increasing demand. Moreover, the GoM has approved up to 10% price hike for urea in the first year of the policy, which would help urea makers have better control over profitability. The new proposals are yet to be approved by the Cabinet. Shares of fertiliser stocks - RCF, FACT, Chambal fertilizer. National Fertilizer and Shiva Global soared 8-12% each.

BSE oil & gas sector was in the red - down 0.2%. Indian Oil Corp slipped 3.5% to Rs 326. ONGC, Cairn India and Gail India were also in the red. However, index heavyweight, Reliance kept above the dotted line at Rs 771. Oil Marketing companies - HPCL, BPCL and IOC added marginally in trades.

FMCG stocks declined in trades with ITC and Hindustan Unilever down 1% each.

BSE market breadth was fairly positive with 2,202 stocks on the advancing side and 701 on the declining side. 2,985 stocks were traded on the BSE today.