ET Bureau
Mumbai, May 4: Indian markets were witnessing a sharp rally Monday mirroring gains in the Asian markets. Traders were catching up with global markets after a long weekend back home. Metals, realty and bankex led the gains while pharmaceuticals space was modestly higher.
"We expect the key Indian indices to rally as risk appetite is holding up globally. World markets were up while we enjoyed a long weekend. The intermediate trend remains up as things are looking up globally as well as back home. But, there is a likelihood of correction after 7-8 week's rally. The outcome of the Lok Sabha could provide a trigger for that. Another cause for concern is the spread of swine flu and its economic fallout."
"US Treasury's stress test results will be out later this week, which will reveal the health of the large American banks. Monthly labour report is also due on Friday in the US."
"On the whole, key global data points show continued signs of improvement, though the recovery is still fragile. There may be a few more hiccups going ahead but not as bad as the ones suffered in October-November and in early March. The upside will hinge on persistent improvement in economic conditions, pick-up in earnings and foreign capital inflows," said India Infoline note.
Bombay Stock Exchange’s benchmark Sensex finally managed to breach 12,000 mark but failed to maintain the psychological level. At 12:35 pm, Sensex was at 11993.79, up 590.54 points or 5.18%. The index touched a high of 12003.44 and low of 11635.24.
National Stock Exchange’s Nifty was near its day’s high at 3628.30, up 154.35 points or 4.44%. The broader index touched a high of 3629.45 and low of 3478.70
BSE Midcap Index was up 3.43% and BSE Smallcap Index moved 3.08% higher.
Amongst the sectoral indices, BSE Metal Index was up 7.14%, BSE IT Index gained 5.78% and BSE Bankex moved 5.52% higher. BSE Healthcare Index was up 1.42%.
On weekly charts, Nifty continues to close above its 50 week exponential moving average (currently placed at 3471.40 levels) however seems to consolidate around 3500 levels before witnessing any further directional action. Even on monthly charts levels of 3520-3530 is seen as strong hurdle. Also during the week, we observed FII remaining net buyer while sectoral indices failed to witness any particular directional action. Volumes in cash segment witnessed mild improvement on weekly basis. Net net, Nifty still needs to clear the levels of 3520 with strong volumes for further up move. FII inflow likely to hold key for further direction. For weekly trade, Nifty faces strong hurdle in the range 3520-3530 on higher side with next hurdle in the range 3690-3700. Any move below 3295-3300 range will see Nifty slipping towards 3150 levels on lower side,” said Reliance Money report.
Biggest Sensex gainers were Sterlite Industries (11.72%), Mahindra & Mahindra (9.63%), HDFC (9.58%), Hindalco Industries (9.1%) and Tata Steel (8.84%).
There were no losers in the 30-share index.
Market breadth on BSE showed 1623 advances outnumbering 687 declines.
Shares across the Asia-Pacific region were also on the rise following China’s encouraging manufacturing data which expanded for the first time in nine months. Hong Kong’s Hang Seng advanced 4.68%, Singapore’s Straits Times rose 4.59% and China’s Shanghai Composite surged 3.28%. Japan’s stock market is closed for a three-day holiday.
Meanwhile, European market opened firm. DAx was up 1.08% and CAC gained 0.48%.