The markets threatened to close in the negative but made a quick recovery during the closing hours and thus closed the day on a fairly positive note. The BSE Sensex closed higher by around 80 points (0.5%), whereas NSE Nifty mustered up gains of about 20 points (0.4%). Buoyancy was also seen amongst BSE Midcap and Small cap indices as these gained higher by 1.2% and 0.6% respectively. Four stocks gained for every three that declined on the Sensex today.
Most of Asia also closed on a positive note today. Europe is also trading mostly in the green currently. Rupee stood at 46.5 to the US dollar at the time of writing.
Today is the fourth day in a row that the Indian markets have managed to close in the positive. This has made its move in line with the MSCI emerging markets index. The latter has also gone up four days in a row and which, as per Bloomberg has pulled down its overall slump in the month of May to around 10%. However, this still makes it its worst month since October of 2008. All said and done, the recent streak of the market is indeed encouraging. Perhaps, the markets had overreacted yet again to the Euro crisis and hence, all this seems like a pullback to realistic levels. However, there is another possibility that the current positive run could be nothing more than a dead cat bounce. We can never be sure of what could transpire. However, if you are an Indian investor, think of every meaningful dip as an opportunity to participate in the India growth story.
Domestic economy reported better-than expected growth of 7.4% in FY10 on the back of 8.6% growth reported in the last quarter (ended March 2010). The overall expansion in economic activity was largely led by manufacturing sector. This sector grew by 16.3% in the fourth quarter (January-March 2010) and 10.8% during the full year. The robust performance was propped up by governmentís stimulus packages and infrastructural activity. What is enthusing is that there was no decline in agriculture growth during FY10, despite widespread drought and floods hitting the farm output. According to the CSO data, the farm sector recorded a growth rate of 0.2% contrary to expectations of negative growth.
Reliance Communication has paid nearly Rs 86 bn to the government towards securing the 3G spectrum. With that it has obtained spectrum in 13 circles including Delhi and Mumbai. The company will have to invest a small sum to develop 3G network as it can leverage its existing network owing to its already-existing nationwide GSM network. However, the move didnít seem to enthuse investors as the stock closed lower by 2% today.