Markets likely to get a bounce back rally on good global cues

The Indian markets gave up all their gains in late trade of last session, as the rupee depreciated to record low levels of 55 per dollar. Traders, who held the stocks throughout the session, went for selling in the last hour fearing exodus of FIIs in view of the continuously depreciating rupee against the dollar. Though some of the rate sensitive counters along with power sector stocks helped the markets make a green close. Today, the start is likely to be positive and the markets may get a recovery rally, tailing the gains in the US and Asian markets. However, the movement of the rupee will be eyed as it has breached its psychological level and further depreciation may impact the sentiments of the market. RBI was conspicuous by its absence in the forex market and might intervene today with some other policy measures if the rupee weakens further. PSU oil marketing companies will be in action as the three major companies will be discussing the petrol price rise issue. Also, there will be lots of result announcements to keep the markets buzzing.

The US markets went for a sharp rally after witnessing a slew of decline in the last week. S&P bounced back above 1300 mark once again as traders went for buying on getting news that Chinese premier Wen Jiabao wants to see more measures taken to stimulate economic growth in China. The Asian markets have made a good start tailing the gains in the US markets and the major indices are trading higher by over a percent.

Back home, Indian markets put a disappointing show on Monday and all effort of strong comeback fizzled out in last, though markets added modest gains to their last session’s positive ending, supported by some good global cues and encouraging earnings number on the domestic front. The start was marginally positive but major indices once seemed faltering, coming very close to breach the neutral line, as the rupee depreciated to its fresh all time low, however the optimism of rate sensitive banking sector and gains in power stocks supported the markets, taking to a positive close. The European markets made a soft-to-flattish start and that discouraged the domestic markets from going further high, and they started losing some strength. However, trade remained stable and markets bounced back to surge to the high point of day, once the European markets started showing sign of recovery, moving higher by about half a percent. Though, choppiness returned to the markets in the last and traders opted to book some profit taking the markets lower. Another factor that continued weighing down the markets was weakness in the rupee that despite all effort continued hovering near its all time low. In the final market hour it came very near to breach the psychological 55 per dollar mark as the euro retreated from the day's high. Rate sensitive sectors like, realty, banking and capital goods remained in jubilant mood since beginning, while the defensive FMCG along with IT and Technology counters which witnessed good amount of sorting, suffered cut of over a percent each. However, one other sector that remained in limelight was power, adding gains of about a percent on some good result announcements in the power sector. Also one non sectoral gauge, media and entertainment too remained buzzing throughout the day after Aditya Birla Group during the weekend agreed to make a financial investment of 27.5% in Living Media India, part of India Today Group, through its private investment company. TV Today Network touched its upper circuit limit of 20%, NDTV too touched the roof, up by 10%, Reliance Broadcast Network was up by 2.9% and Entertainment Network was up by 1.76%. The broader indices that looked firm since beginning, outperforming the benchmarks, despite losing some strength managed to post a good show, while the BSE Mid cap index was up by over a quarter percent and small cap index snapped the trade higher by a percent. Finally, the BSE Sensex gained 30.51 points or 0.19% to settle at 16,183.26, while the S&P CNX Nifty rose by 14.60 points or 0.30% to close at 4,906.05.