India Markets Wednesday Wrap-Up: Cheering China's Rate Cut

After witnessing considerable volatility for major part of the day, markets staged a smart rally in the final hour of trade. Buying in index heavyweights propelled the indices to higher levels mainly on hopes that Indian central bank will resort to rate cuts after a surprise steep rate cut announced by China's central bank today.

While buying was witnessed across sectors, auto majors were out of favour. As regards global markets, while the Asian indices closed in the positive, the European indices are witnessing a mixed trend.

The BSE Sensex closed almost 340 points higher and the NSE Nifty closed almost 100 points higher. The rupee was trading at 49.36 to the dollar.

The broader indices began the day's proceedings on a firm note and oscillated to either side of the dotted line for most of the day. However, during the final hour of trade intense buying activity in the index heavyweights led the indices to gain smartly and close well above the breakeven. While Sterlite Industries (up 13%) and ICICI Bank (up 9%) led the pack of gainers on the Sensex today, M&M (down 2%) and Maruti Suzuki (down 1%) remained out of favour.

As per a leading business daily, Maruti Suzuki is planning to expand its presence across European markets. The company is planning to export cars to the European Union from its upcoming dedicated car terminal at Mundra Port. The company has inked a 20-year lease agreement with Mundra Port & Special Economic Zone Ltd for the terminal. The first consignment to be shipped through this port facility will comprise Maruti's newly launched small car, the A-Star. The company aims to notch up exports of 200,000 cars by 2010-11. This move will help the company to geographically diversify revenue stream. While the stock of Maruti Suzuki ended lower by 1%, its peer Tata Motors ended higher by 3%.

Textile stocks ended mixed today. While the pack of gainers was led by Welspun India (up 6%) and Raymond (up 1%), the pack of losers was led by Bombay Dyeing (down 1%). As per a leading business daily, Alok Industries has increased its export target for FY09. The company has raised its export target to Rs 12 bn in FY09 from earlier projected Rs 10 bn.

The company has revised its target upwards mainly on account of a strong order book accretion and shift of orders from large retail chains in Western countries to Indian textile players, as key competitor countries like Pakistan are facing political and economic uncertainties. The company is also expected to be benefitted by 1.7% appreciation of the Chinese yuan, which has made Chinese textile products dearer to Indian products. The stock of Alok Industries closed lower by 1%.

Comments

[Natalie Le:]

Bombay Stock Exchange and National Stock Exchange was closed on Thursday after the attacks, which killed 101 people and brought the security forces into two luxury hotels in south Mumbai.

Aaron Lee Smith, MD of Superfund Financial mentions a rally coming soon but downside risks are there and eventually stocks are a dangerous place to be in.

www.youtube.com/watch?...

2008 Dec 03 03:06 AM