Markets shows sign of recovery; RIL surge

Indian markets are witnessing a mild pullback in the mid morning session supported by the gains in the heavyweights like Reliance Industries, Wipro, SBI etc. Though the mood of the markets still remains sluggish as the participation of broader indices are still missing, who are trading lower by half a percent. The concern of lower than normal monsoon seems to have been left aside for the time being and the marketmen are opting value picking taking the markets higher. Benchmark indices have stabilized and are trading higher by about a quarter percent of their lows of the day. Oil & gas one of the top gainers of last session is leading the sectoral pack closely followed by IT and technology stocks, healthcare, Capital Goods, and Consumer durables are still to get any respite.

The BSE Sensex is currently trading at 17,625.53, up by 74.90 points or 0.43%. The index has touched a high and low of 17,626.30 and 17,482.21 respectively. There were 21 stocks advancing against 9 declines on the index.

The broader indices are underperforming the benchmarks; the BSE Mid cap and Small cap indices were down by 0.49% and 0.54% respectively. The market breadth was weak with 35.36% stocks advancing against 60.22% declines.

The top gaining sectoral indices on the BSE were Oil & gas up by 1.15%, TECk up by 0.53%, IT up by 0.44%, FMCG up by 0.20% and Power was up by 0.18%, while the losers were HC down by 0.67%, CG down by 0.33%, CD down by 0.24%, Realty down by 0.21% and Metal was down by 0.19%.

The top gainer on the Sensex were RIL up by 1.75%, Wipro up by 1.72%, RCom up by 1.71%, Sterlite Inds up by 1.13% and NTPC was up by 1.06%.

On the flip side, Cipla down by 1.335, Maruti Suzuki down by 1.26%, BHEL down by 0.76%, HDFC down by 0.40% and Jindal Steel down by 0.30% were the top losers.

Meanwhile, Reserve Bank of India's Deputy Governor Subir Gokarn has ruled out any incremental threat to inflation from the latest monsoon forecast saying one should consider the regional spread of the rainfall. He said, 'For the moment, going by the latest forecast I don't think there is any reason to be concerned (about its impact on inflation)."

The deputy governor said the latest forecast suggests that monsoon will be 95% normal. The impact on inflation is really going to be a function of the regional spread of it. I think one element of the forecast was the Central region, which is a pulses and oil seeds zone, and there too it will be around 94%. Monsoon between 96-106% is considered as normal monsoon. 'So I don't think if the forecast is accurate that poses much of a threat, he added.

Indicating that the collective forecast will be important, Subir Gokarn said, what is more important is the regional spread, but the regional forecast tends to be much more inaccurate, so one has to take that into consideration. He also said, there is comfort arising from the softening commodity prices and but pointed out that certain food items are still ruling high due to supply side pressures.

On the effectiveness of the monetary transmission measure taken by RBI, Gokarn said, there are comforting signals, as the wedge between credit and deposit growth has come down to under 5 per cent now, which was 9 per cent in March. As per the deputy governor, market volatility will not affect the current account deficit (CAD) and he said, as of now there is no threat to this, for FY11, the CAD is pegged at 2.5% of the gross domestic product.

On the uncertainty in the global economy, Subir Gokarn said, the resolution of the Greece situation will clearly reduce some of the uncertainty surrounding the state of the Euorzone economy. But the US is also showing signs of slowing down. It is not confined to Europe; it was what appears to be a broad-based weakening of whatever momentum we saw in the first quarter.

The S&P CNX Nifty is currently trading at 5,294.20, up by 15.90 points or 0.30%. The index has touched a high and low of 5,295.10 and 5,252.25 respectively. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty are Reliance Industries up by 2.01%, Wipro up by 1.96%, RCom up by 1.82%, Sterlite Inds., up by 1.75% and NTPC was up by 1.34%.

On the other hand, Ambuja Cements down by 1.78%, Sesa Goa down by 1.75%, Maruti Suzuki down by 1.71%, Cipla down by 1.36% and Dr Reddy's down by 1.16% were the top losers.

The Asian markets too are showing sign of recovery though still many are trading in red,; Hang Seng was down 0.79%, Jakarta Composite was down 0.13%, KLSE Composite was down 0.22%, Seoul Composite was down 0.09% and Taiwan Weighted was down by 0.52%.

On the other hand, Shanghai Composite was up 0.24%, Nikkei 225 was up by 0.05% and Straits Times was up by 0.11%.

Unit-8, 3rd Floor, First Mall, The Mall, Ludhiana-141001, Punjab (INDIA).

To unsubscribe or change subscriber options visit: http://www.aweber.com/z/r/?TJzsLEwstCyc7OysHMyctEa0jAxMzEzMzAw=