Markets volatile ahead of a long weekend

Indian markets gave up 80 per cent of their gains today in a volatile day's trading as investors chose not to take a long view of the markets ahead of a long weekend despite boosters by the Federal Reserve to keep big financial institutions from collapse and keep the world's biggest economy fromfalling into recession.

The benchmark Bombay Stock Exchange (BSE) 30-share Sensex closed below the crucial 15,000-mark after investors used the rally of 650 points at opening to book profits.

The Sensex closed the day at 14,994 points, managing to sustain a 161-point or 1.09 per cent gain during the day.

The broader 50-share S&P CNX Nifty index of the National Stock Exchange closed up 40 points at 4,573.

The Indian stock markets are closed on March 20 and March 21 for local holidays.

The information technology index rose the most among sectoral indices on the BSE as the rupee lost some ground. Satyam Computers was the top gainer in the Sensex pack, up 5.24 per cent at Rs 389.

Among others, Wipro was up 4.64 per cent at Rs 376, Infosys Technologies gained 2.19 per cent at Rs 1,341 and TCS slipped 0.89 per cent to close at Rs 810.

Tata Motors was up 5.08 per cent at Rs 650 and Mahindra & Mahindra was up 3.49 per cent at Rs 658.

Market breadth, however, was poor as 69.95 per cent or 1,923 stocks declined against the advances of 758 stocks.

Investors were not confident and were looking to exit on every rise in stock prices.

"It is too early to take any call on the markets now as we are still uncertain about the level of bad news from the US credit turmoil," said Naval Bir Kumar, managing director, StanChart Asset Management Company (AMC).

On the back of the Fed rate cut by 75 basis points to 2.25 per cent yesterday "" the lowest in over three years "" the Asian markets gained 1 to 2.50 per cent today.

The Shanghai Composite was the top gainer, up 2.53 per cent. The Nikkei (+ 2.48 per cent), Hang Seng (+2.26 per cent), Seoul Composite (+2.11 per cent) and Taiwan Weighted (+1.51 per cent) were all up at the end of the day.

News reports indicate that Wall Street experts anticipate more rate cuts by the Fed sometime next month.

Rajiv Deep Bajaj, managing director, Bajaj Capital, said investors with a long-term perspective could look at entering the markets at current levels as prices are quite attractive.

"We are nearly back to the levels of a year ago before the frenzied rally in stocks. Current levels seem to be highly attractive as the risk-reward ratio too is favourable. The bottom of the market does not seem to be far from current levels," he said.

Manish Sonthalia, vice-president of equity strategy at Motilal Oswal Securities Ltd, said advance tax filings by some of the large corporate houses suggest that the results season may not be all that negative for markets as some have predicted.

However, the rise in inflation above the Reserve Bank of India's caution limit of 5 per cent remained a concern for many experts.

"Investors should be cautious about buying stocks because the rise this time may not be as spectacular and sharp as last year if inflation does not stabilise at or below these levels," said Satish Ramnathan, equity head at BNP Paribas AMC.