VantageTrade Eagle Eye: Nifty and Sensex up on stimulus expectations from the Fed

The markets rebounded yesterday after Sensex settled 244 points down and Nifty ended 75 points down on Monday's trading session due to RBI decision to keep the rates unchanged. Markets managed to open in Green yesterday morning but selling pressure sent them in negative terrains. Bargain hunting at the lows lifted the market into the positive in the mid-morning session with the gains continuing till noon trade. But choppiness continued for the remaining part of the session with the indices touching their previous closing figures once again. Investors also overlooked the downward revision of India's rating outlook by Fitch, announced post market Monday. Select buying helped the indices move higher in late trade.

Gains in oil and gas, pharma and FMCG stocks let the markets recover during yesterday's volatile session. The Sensex ended at 16,859.80, up 153.97 points, or 0.92%. It touched an intraday high of 16,890 and a low of 16,681.89. The Nifty ended at 5,103.85, up 39.60 points, or 0.78%. It touched an intraday high of 5,113.60 and a low of 5,048.10.The rupee traded off the day's low, at 55.94 against the dollar.

US markets rose yesterday and ended at five-week highs after upbeat housing data, as the Federal Reserve considered further moves to stimulate the economy. A recent batch of disappointing U.S. economic data such as industrial production, retail sales and jobless claims, has contributed to the optimism about further stimulus to be announced following the conclusion of its two-day monetary policy meeting on Wednesday, along with continued concerns about the impact of the ongoing financial crisis in Europe. The Dow Jones industrial average gained 95.51 points, or 0.75% to 12,837.33 at the close. The Standard & Poor's 500 Index advanced 13.20 points, or 0.98%, to 1,357.98. The NASDAQ Composite Index rose 34.43 points, or 1.19%, to close at 2,929.76.

Asian shares rose on Wednesday and the Euro clung to most of the previous session's gains as investors bet that Europe's worsening debt crisis and faltering global growth will prompt major central banks to launch a new round of monetary stimulus. The markets are awaiting also the results of The US Federal Reserve. It is expected that the central bank will extend its bond-buying program named "Operation Twist". Japan's Nikkei 225 index was trading 0.8% higher at 8,724.75 and Hong Kong's Hang Seng index was trading higher at 19,520.12, up 0.5%. South Korea's Kospi index was trading 0.3% higher at 1,898.45. China's Shanghai index was trading at 2,300, down 0.03%.

Indian markets opened positive today along with Asian markets that gained on expectations that the Fed may provide stimulus to US economy. The Sensex gained 25 points to 16,885.02 and the Nifty moved up 9 points to 5,112.75. The rupee stayed below the 56 mark to the dollar.

Shares of cement majors like Ambuja Cements, ACC and Ultratech Cement tanked around 4% ahead the Competition Commission of India's final report on cartelization allegations. According to reports, the watchdog may slap a fine of about Rs 3,000 crore, ruling them guilty of forming a cartel and fixing prices.

HCL Technologies has signed an IT outsourcing contract with Walt Disney in a deal valued at over $200million (around 1,100cr). Under this deal, HCL Tech will update technological infrastructure and update and support software for the $41bn company, including its theme parks and resorts businesses.

Other Economic and Political News:

• Government to take tough decisions to revive economy: PM
• PM pledges US$10bn for debt-wracked euro zone
• Advance tax collection in Q1 up 5% at `33,089cr
• BHEL commissions 500 MW unit for Vindhyachal Project
• Maruti, Tata Motors, Toyota stop production as demand slump continues
• Mindtree gains after coffee magnate (CCD) buys stake
• ONGC's Tripura plant to start generation from July end
• Veritas downgrades RCom, puts target price at `15

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