Andrew L D'Cunha
Mumbai, Dec 1: The Indian markets witnessed a relief rally in today's trading session boosted by extremely positive global cues. The Sensex closed up 360 points at 16483 and the Nifty was up 105 points, closed at 4937. Sensex added 595 points in an opening session of the trade, while, NSE Nifty crossed 5,000-level after six major central banks agreed to make cheaper dollar loans for struggling European banks.
The 30-share index touched intraday low of 16431 and high of 16718. Nifty touched high of 5022 and low of 4917. However markets closed off day's highs as traders chose to book profits at higher levels. Metals, banks and realty led the up move while pharmaceuticals stocks ended in the red. Sensex added 595 points in an opening session of the trade, while, NSE Nifty crossed 5,000-level . after six major central banks agreed to make cheaper dollar loans for struggling European banks.. The 30-share index touched intraday low of 16431 and high of 16718. Nifty touched high of 5022 and low of 4917.Major large caps like Reliance Industries, Infosys, HDFC, L&T, ITC, SBI, TCS and NTPC gained 1.5-3%. ICICI Bank, Tata Motors, Hindalco, Sterlite, DLF and SAIL shot up 5-7%. A moderating food inflation also helped the markets positive mood..
Global markets reacted very positively to a huge injection of liquidity from the U.S. and other central banks. China China also lent a hand by cutting the reserve ratio requirement for its banks for the first time since 2008. U.S. stocks rallied Wednesday, with the Dow industrials chalking up their best day in more than 2 ½ years, as the Federal Reserve and five other central banks moved to help banks hit by Europe’s debt crisis. Asian shares joined in a global rally as investors welcomed central bank moves to slash dollar credit costs in Europe and ease monetary conditions in China. Chinese shares outperformed, with the Hang Seng Index surging close to 5.6% . while the Shanghai Composite Index climbed 2.3%. Japan’s Nikkei Stock rose 1.9%.
Food inflation cools down
India's food inflation dipped to 8% for the week ended November 19 against 9.01% reported a previous week, though prices of most agricultural items, barring potatoes, onions and wheat, continued to rise on an annual basis.
The fall in food inflation could give a sigh of relief to the Reserve Bank.. The RBI has hiked interest rates 13 times since March, 2010, to tame demand and curb inflation. The decline in the rate of price rise in food items is likely to bring some relief to the government and the Reserve Bank, which have been facing flak from all quarters for persistently high prices. In its second quarterly review of the monetary policy last month, the central bank had said it expected inflation to remain elevated till December on account of the demand-supply mismatch, before moderating to 7% by March, 2012
Gold Futures in India Cross Rs 29000
Gold futures rose in India for the third straight day tracking the firm global trend. Overseas gold prices are hovering above US$ 1,740-level after world's major central banks united to support struggling European nations. The US Federal Reserve, the European Central Bank and the central banks of Japan, Switzerland, Canada and Britain joined hands to prevent the euro zone debt crisis to spread more.
The central banks have decided to provide cheaper US dollar loans to European banks so as to stem debt crisis. Further, they have decided to lower the cost of existing dollar swap lines by 50 bps from December 5. They would also arrange bilateral swaps to provide liquidity for other currencies. International spot gold touched US$ 1,750 – a mark over the news, resulting a strong recovery in domestic and global equities. Back to India, the December gold futures have crossed Rs 29,000 – level, and were seen trading at Rs 29,023 – Rs 29,033 per 10 grams after touching a high of Rs 29,140 per 10 grams.
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Andrew L D'Cunha, Managing Director, WinWin Fin Advisory Pvt. Ltd. Mangalore. Email: finadvisoryltd@yahoo.com.