Europe saves the day, Sensex ends on a positive note

3.30 p.m: Indian markets signed off near their high, with BSE Sensex trading 2.25 percent, or 376 points, higher at 17,121. NSE Nifty was up by 116.95 points at 5148.90.

IT stocks were the star performers, with the IT index closing 3.34 percent higher. Infosys closed the day at Rs 2,435, inching up 3.07 percent, while TCS ended the day at Rs 1,064, up 4.51 percent. SBI closed the day at Rs 1,997, a rise of 4.18 percent, and Reliance, at Rs 852, moved up 3.73 percent.

Four stocks have contributed more than half of the index gain. Reliance, Infosys, HDFC and ICICI Bank made up for slightly more than half the gain in the Sensex. Among the index stocks, only ONGC and BHEL were trading in the negative territory.

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However, market depth remained fairly positive, with 994 stocks advancing against 438 losing out.

A stable European market, which bounced back after a week start, was trading over 1 percent higher. European markets were expected to open lower as Italy was downgraded by S&P . This has led to a frantic covering up of short positions.

The rupee after touching a 2-year low of Rs 48.20 against the dollar closed higher at Rs 47.95. Oil and gold were both trading 1 percent higher.

2.00 p.m: BSE Sensex jumps sharply by 279 points to 17,024 while NSE Nifty was trading 81 points higher at 5,111. Smart recovery by European markets is at work, which are trading nearly 1 percent higher.

Technology index has gained the most and trades 2.9 percent higher. Both TCS and Infosys are ruling at nearly 3 percent higher than their previous close. All the sectoral indices have turned positive.

Banking stocks are following suit, with SBI trading at Rs 1,972, up 2.85 percent, and Axis Bank at Rs 1,137, gaining 3 percent. Crompton Greaves has said its scheme of amalgamation with its 100 percent subsidiary has been cleared by the high court. Among frontline stocks, ONGC is the biggest loser, having lost nearly 3.3 percent of its value and trading at Rs 260.

The rupee has recovered from its low and now trades at Rs 48.08/09 while gold trades one percent higher. Market depth remains strong with 990 stocks advancing against 433 that are declining.

12.30 p.m: European markets opened marginally lower, less than 0.5 percent, despite Italy being downgraded by S&P. Indian markets continue to trade high with BSE Sensex ruling at 16,925, up 180 points, while NSE Nifty is trading at 5,092, up 60 points.

Meanwhile, ONGC has slid to a fresh low of Rs 260.65, down 3.14 percent, on news of the company being made to shell out twice the amount as subsidy. The other PSU which has been affected is BHEL, which has been chosen for divestment ahead of ONGC. These stocks have resulted in PSU index moving in the negative zone. Technology stocks continue to move in the upper circuit as their index is trading 2.45 percent higher. Apart from the PSU index, all other indices are in the positive territory.

In an interesting report by Bernstein Research on Reliance Power, the research firm points out that there is a possibility of Reliance Power being merged with Reliance Infrastructure at a discount to market value, in the same way as Reliance Natural Resources was merged with Reliance Power. The report goes on to say that if Reliance Power is able to commission its slated 24-GW plants over the next five years, the share price of the company can triple. Reliance Power trades 2.38 percent higher at Rs 81.70.

Meanwhile, Hindalco gains traction at Rs 148.50, higher by 2.98 percent. The company is likely to get clearance for its Mahaan project.

11.30 a.m: Indian markets continue to ride high with BSE Sensex climbing to 16,908, 163 points higher, while NSE Nifty trades at 5,080, up 49 points. Markets are consolidating at these levels and await direction from European markets.

Software companies are leading the pack with the IT index trading 2.17 percent higher. Except for capital goods, all the other indices are in the positive zone.

Fortis Healthcare, which announced a cash payment to its promoters for acquiring their stake in Fortis International, is trading at Rs 142.10, tumbling 1.63 percent.

Oracle Financial trades higher as the company had announced the launch of new Basel II compliant software. The stock trades at Rs 1,864, inching up 2 percent.

Everonn Education continues to remain at the upper circuit after the company announced issuance of preferential shares at Rs 528 per share. The stock currently trades at Rs 367.20.

IVRCL is taking a hit, down 4.4 percent at Rs 39.80, after being put under the CBI scanner.

10 a.m: Indian markets had a flat opening, butslowly picked up. The IT index led the way as the rupee plunged to a new 2-year low of 48.17/18 against the greenback. BSE Sensex trades 157 points higher at 16,902 while NSE Nifty, at 5,078,is up 47 points.

The IT index is higher by 2.14 percent, with Infosys trading at Rs 2,416, up 2.25 percent, and TCS at Rs 1,040 up by 2.16 percent. With the talks breaking down and no further news flow from the Volkswagen hostile takeover, Maruti Suzuki is trading lower at Rs 1,121, down 1.70 percent. GTL is moving up after details of its corporate debt restructuring were announced. The stock is at Rs 71.10, up 3.49 percent.

Eros Media has touched a new high of Rs 260.80, but currently trades at Rs 258. Sugar stocks continue to trade near their all-time lows as sugar prices have taken a hit.

Meanwhile, retail investors are likely to be hit with the announcement of some 1,000 non-compliant companies being transferred to the Trade-to-Trade group (T Group). A number of these companies are public sector ones. With a number of brokers not permitting trades in these shares, one can expect volatility in these stocks.

9.15 a.m: Though Italy has been downgraded one notch by S&P, Asian markets have not reacted too negatively to the news. We are likely to see a flat opening for Indian markets.

[caption id=“attachment_87665” align=“alignleft” width=“380” caption=“We are likely to see a flat opening for Indian markets. Reuters”]  [/caption]

Among the stocks that are likely to be affected are IVRCL, which has been put under the CBI scanner following irregularities in the Tsunami housing project in Puducherry. Maruti is also likely to be affected, after the government withdrew from talks following a negotiation breakdown due to the arrest of a union leader.