It’s a great day for the Indian markets as the Sensex has opened a little over 250 points higher at 16897 levels while the Nifty is up 82 points at 5124 on positive global cues and a worldwide rally in risk assets. The rupee too rose in opening trade , extending gains for a second successive session.At 9:03 a.m, the rupee was at 55.49/51 to the dollar versus its last close of 55.52/53.
Domestically, this is a technical bounce back after a two-day fall but globally the trigger is European Central Bank president Mario Draghi saying that the ECB is willing to do whatever it takes to preserve the euro. Draghi’s pledge to support the euro has fueled some speculation about fresh monetary easing by the ECB.
But there are worrying signs too. FIIs have turned net sellers in the past two-three days, which doesn’t bode well for the sentiment. The near-term prospects look bleak. A weak monsoon has compounded the problems for policymakers, especially the RBI. It is unlikely to lower rates on July 31 as inflation remains sticky, twin deficits are pretty high and the government continues to dither on the policy front.
Asian markets have made an all green start with some of the indices gaining over one and half a percent in early trade after Draghi’s comments.
Draghi’s pledge to support the euro has also fueled some speculation about fresh monetary easing by the ECB.However, history suggests that past measures by the eurozone policymakers to calm financial markets haven’t been successful.
Domestically, stocks contributing to gains on Sensex are ICICI Bank, up 3.2 percent, ITC rises 1.3 percent and RIL is up 1.2 percent.
Tata Motors is the top Sensex/Nifty gainer, up almost 4percent.
BSE bankex is up 2 percent and is the top sectoral gainer. ICICI Bank rises 3.5 percent, leading gains on Sensex and Nifty. India’s No.1 private lender reports Q1 numbers today.
Sun Pharma is the sole loser on Sensex and Nifty, down 0.5 percent.
There is likely to be jubilation in export related stocks as the government is confident that exports will meet the 20 percent growth target set for the current financial year.The government is looking at exports of $360 billion in the current fiscal against $303 billion in 2011-12 on the back of policy initiatives announced by commerce minister.
Meanwhile, the retail stocks too are likely to get some support with Trade Minister Anand Sharma saying that the government is committed to opening its retail sector to foreign investment and will not reverse its stance.
However, the banking stocks may decline later in the day with the government issuing a drought alert and worries that farm loan repayments will be hit. The Centre has set Rs 575,000-crore agriculture credit target for banks this fiscal year.
The expert committee on GAAR (General Anti Avoidance Rules), set up by Prime Minister Dr. Manmohan Singh has begun the process of consultations with various stakeholders.
Stocks in news
State Bank of India has raised $1.25billion through the largest international offering by a local bank after the Lehman Brothers collapse. The stock is up 2 percent at Rs 2055.80.
Wockhardt is up 1.75% to Rs 965.75 as it has concluded the divestment of Nutrition Business to Danone on July 26 for a consideration of Rs 1,280 crore, including its wholly owned subsidiary.
Sterlite Industries rose 4% after better than expected numbers in the quarter ended June 2012. ACC too gained 3% on strong results yesterday after market hours.
After yesterday’s sharp fall,Tulip Telecom is up 8.5% Pipavav Defence, Monnet Ispat up 5-9 percent.
Shares of Sun TV and SpiceJet have taken a beating this morning amid media reports that the CBI questioned former Union Textile Minister and Lok Sabha MP Dayanidhi Maran and Sun Group CMD Kalanithi Maran on the Aircel-Maxis deal. Trading volumes on the two counters have also climbed.
Key Results Today: Alstom T&D, Bank of India, Central Bank, CESC, Dena Bank, Dewan Housing, Essel Propack, GHCL, Grasim Inds, Gujarat Pipavav Port, HCC, ICICI Bank, IRB Infra, Jindal Saw, M&M Financial Services, Mangalore Refinery, Mastek, McLeod Russel, Nestle India, Neyveli Lignite, NTPC, PNB, REC, Sterlite Technologies, Strides Arcolab, Thomas Cook, Trent, Triveni Engineering, TVS Motor Company, Union Bank, United Spirits.