Oct 10, 2008

Markets likely to open gap up following positive global cues, but could witness profit taking at higher levels

19 Sep 2008 | 09:48
Markets likely to open gap up following positive global cues, but could witness profit taking at higher levels

On Thursday, the Indian Markets witnessed a phenomenal recovery from the lows to close in the positive. The BSE Sensex bounced back from the low of 12558, to close at 13315.6, up by 0.4% over Wednesday’s close. The Nifty opened gap down on account of weak global cues & made an intra-day low of
3799.55 in the early hour of trade. However, it found support at those lows & recovered sharply during the day, entering into the positive terrain.
Towards the end, it made an intra-day high of 4050.1 before closing at 4038.15, up by 0.8% over Wednesday’s close. The NSE cash turnover stood at Rs. 16088 crores in comparison to Rs. 12278 crores on Wednesday. The market breadth was negative on BSE with the advance-decline ratio of 1:3. Among the sectoral indices, Realty & Consumer Durables fell the most by 4.5% & 4% respectively. However, Banks & Oil & Gas indices outperformed, increasing by 2.7% & 2.4% respectively.

Wall Street had its best day in six years on Thursday as news that the government is considering a more comprehensive solution to the financial crisis than the current piecemeal approach spurred a furious late rally. Dow Jones & Nasdaq both increased by 3.9% & 4.8% respectively. The Indian ADRs ended in the green with Infosys, Wipro & Satyam increasing by 1.7%, 7.5% & 1.5% respectively. Tata Motors increased by 12%. ICICI & HDFC Bank closed up by 11.7% & 11.2% respectively. Among the Latin American markets, the Mexican markets increased by 4.8%. Among the Metal prices, Aluminium, Copper & Nickel decreased by 0.2%, 0.1% & 2.9% respectively, while Zinc increased by 1%. The light crude oil for October increased by 0.7% to settle at $97.9 a barrel. Today, the Asian Markets are trading up on a strong note with Nikkei & Hang Seng up by 3.3%, 6.5% respectively. Even Shanghai & Singapore Strait are trading up by 9.5% & 3.9% respectively.

On Wednesday, the FIIs were net sellers of Rs. 1334 crores in the cash markets, while they were net buyers of Rs. 383 crores in the F&O markets.
Mutual Funds were net buyers of Rs. 410 crores. As per the provisional figures, FIIs were net sellers of Rs. 1200 crores in the cash market on Thursday, while they were net buyers of Rs. 996 crores in the F&O markets.

Today, we expect the Markets to open gap up following positive global cues.
However, at higher levels, it could witness some profit taking during the day. Banks, Realty, Autos & Oil & Gas could do well today.

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