Sensex breaks losing streak, gains 100 points

The markets today reversed its four-day losing streak. The Sensex touched a high of 18,440 -- up over 200 points -- in early trades on the back of positive news flow from the overseas.

US President, Barack Obama announced a framework debt-limit deal ahead of Tuesday's deadline. This will raise the US borrowing limit and help avoid a default.

However, weakness in metal stocks dragged the markets off the day's high. The index touched a low of 18,219 - down 220 points from the day's high. Fresh buying in IT and auto sectors helped the index to finally end at 18,314 - up 117 points. The Nifty ended up 35 points at 5,517.

Asian markets also ended in the positive zone. The Hang Seng gained 1% at 22,663, and the Nikkei advanced 1.3% to 9,965.

Meanwhile back home on the economic front we had some disappointing news. The Prime Minister's Economic Advisory Council said that, India's GDP growth will slow down to 8.2% in the current fiscal and the inflation rate is expected to remain high at 9% till October. The report further said that the global economic and financial situation was unlikely to improve (in the foreseeable future) and this could impact the domestic economy.

Meanwhile, India's exports grew by an impressive 46% to $29 billion in June, 2011, despite uncertainty in the US and European markets. Merchandise exports aggregated to $20 billion in June, 2010. During the April-June quarter, overseas shipments grew by 46% to $79 billion, according to Commerce Ministry data released today.

Market heavyweight, Reliance, ended flat at Rs 832 after Friday's fall. On Friday, the stock had touched its 52-week low of Rs 824. This follows the company's below-par growth in Q1 net profit.

Auto stocks were flat in lieu of mixed sales numbers from several auto companies. Mahindra & Mahindra posted its highest monthly sales in July, up 41% at 39,633 units. The stock added 1.7% to Rs 731. Maruti Suzuki, however, reported a 25.34% fall in total sales for July to 75,300 units, mainly due to sluggish market condition and non-production of hatchback Swift as the company is preparing to launch a new version of the car soon. The stock was flat at Rs 1,211. Meanwhile, TVS Motor July sales rose 14% to 189,962 vehicles while Suzuki Motorcycle sales went up 46%.

BSE metal index dropped 1.2% at 13,841. JSW Steel plunged 10%, extending the 10% fall of the last two trading sessions, after the Supreme Court suspended all mining operations in the Bellary district of Karnataka till further orders. Jindal Saw, SAIL, Nalco and Jindal Steel were down 5% each.

Among banking stocks, state-run Corporation Bank, Indian Overseas Bank and two other lenders raised their base rates with effect from toay, after the RBI's larger-than-expected interest rate hike last week. Reserve Bank of India had last week raised its policy rates by a larger-than-expected 50 basis points.

In other news, US investment bank Morgan Stanley slashed its growth forecast for India for the current fiscal year as well as next citing rapidly deteriorating near term growth outlook for Asia's third biggest economy. India is headed for its worst period of growth since the global credit crisis and support from all major growth drivers for the economy will wane at the same time, the bank said.

BSE market breadth was fairly negative. Out of 2,975 stocks traded, 1,632 stocks declined while 1,204 advanced in trades.