Markets open sharply higher as inflation, oil decline
August, 29th 2008
Equities opened with a gap-up on Friday on the back of positive cues from both domestic as well as global front.
To begin with, Indias annual wholesale prices index rose 12.40 per cent in the 12 months to August 16, below the previous week's 12.63 percent rise. This had a positive impact on interest rate sensitive sectors like realty, banks and auto.
Oil prices were at $116.88 per barrel after dropping $ 2.56 dollars in trade previous day leading to a spurt in shares of oil&gas companies.
Traders are now awaiting India's quarterly GDP data to be out by afternoon. It is likely to have 8.1 per cent in the April-June quarter, its slowest pace in nearly three years, as tight monetary policy to calm rising inflation dented demand. It will provide further direction to the market.
Bombay Stock Exchanges Sensex was at 14,401.11, up 352.77 points or 2.51 per cent. It touched a high of 14,414.87 and low of 14,279.02.
National Stock Exchanges Nifty was up 96.25 points or 2.28 per cent at 4,310.25. The broad based index touched a high of 4,320 and low of 4,230.60 in trade so far.
Though Nifty is technically weak, ignore that weakness and have a positive outlook. Get bearish only if we see a close below 4,200 on the Nifty. The 4,200 strike price also happened to see good put writing, which makes it a support and the derivative and technical notes tally on this count. Expect the banking and other interest rate sensitives to rally. Better than expected growth of Q2 US GDP should also augur well for the technology stocks, said Anagram Stock Broking.
BSE Midcap Index was up 1.89 per cent at 5,714.67 and BSE Smallcap Index moved 1.34 per cent higher at 6,873.07.
Biggest Sensex gainers were ICICI Bank (6.09%), HDFC Bank (4.67%), State Bank of India (4.18%), Reliance Infrastructure (3.83%) and Jaiprakash Associates (3.59%).
Ranbaxy Laboratories, down 0.7 per cent, was the only loser in the 30-share index.
Market breadth was extremely positive with 1292 advances and 284 declines on BSE, while on NSE, there were 883 gainers and 135 losers.
Meanwhile, better-than-expected economic news sparked a rally on Wall Street, with a 212.67-point surge to 11,715.18 in the Dow Jones Industrial Average and 1.22 per cent rise on Nasdaq Composite Index which ended at 2,411.64.
Asian markets were in the green taking cues from US GDP data. Nikkei 225 was up 1.16 per cent, Shanghai Composite gained 1.18 per cent, Hang Seng moved up 1.86 per cent and Strait Times gained 1.23 per cent.