Sensex ends 173 pts higher on global cues; IT, banks gain

The benchmark Sensex bounced back on Tuesday after witnessing losses for the previous three consecutive days and closed 153 points higher. The rally was led by positive global cues, which was imminent after losses as well as some consolidation in the last few days.

European markets like CAC, DAX and FTSE were trading 2-3% higher while Dow Jones futures gained 1% and Nasdaq futures went up 1.4%, at the time of closing of Indian equities. Even commodities witnessed buying interest; Crude Oil futures rose 1.12% to USD 72.95 a barrel on the New York Mercantile Exchange.

Base metals like copper, zinc, nickel, led, aluminium and tin gained 0.6-1.5% on the London Metal Exchange. Gold went up 0.3% at USD 1210.72 an ounce.

Asian markets also recovered after initial downtrend; Shanghai rose 1.92%. Hang Seng, Jakarta and Taiwan Weighted moved up 1.2-1.5%. Nikkei, Straits Times and Kospi rose 0.6-0.8%.

The 30-share BSE Sensex closed at 17,614.48, up 173.04 points or 0.99% and the 50-share NSE Nifty rose 53.15 points or 1.02% to settle at 5,289.05. The Nifty July futures ended at 11 points premium.

UBS Securities remains positive on India despite global worries, its Head of Research, Suresh Mahadevan, told CNBC-TV18. "The markets are trading at 13 times forward earnings. We are estimating a earnings per share of Rs 1,345 for the Sensex in FY12." He advises buying on dips as valuations are attractive.

However, Gautam Shah of JM Financial remains cautious on Indian markets as he sees them breaking down. "The Nifty may break below 5,050 in the near-term. A 15% fall over the next two months cannot be ruled out."

All the sectoral indices ended in the positive terrain; technology, metal, financial, oil & gas, FMCG and capital goods companies' shares supported the Nifty, which was just 11 points away from the 5300 mark. However, Reliance Communications, Reliance Power, Jaiprakash Associates, Idea Cellular, Hero Honda, ACC, Ambuja Cements and Maruti were the only losers.

Software companies' shares witnessed buying interest ahead of numbers for the quarter ended June 2010. TCS rose 2.7%. Wipro, Infosys and HCL Tech gained 1.3-1.9%.

In the financial space, HDFC Bank and ICICI Bank were up 2-2.55%. SBI was up 1.77% and Axis Bank up 1.4%. Kotak Mahindra Bank, HDFC and IDFC went up 0.2-75%.

Regards,
Free Indian Stock Tips Team