While the markets turned progressively weaker during the closing stages of the day, they could not completely wipe off the gains, resulting in a positive ending for the day. While the Sensex edged higher by about 70 points (0.4%), NSE Nifty closed with gains of around 20 points (0.4%). BSE Midcap and Small cap indices on the other hand ended virtually flat today. The scrips that contributed majorly to the Sensex gains were Reliance, ITC and HDFC Bank while ICICI Bank and DLF exerted downward pressure. Three stocks declined for every two that gained on the Sensex.
While most Asian markets closed strong today, Europe is also trading in the positive territory currently. The rupee was seen trading at Rs 46.2 to the dollar at the time of writing.
India too, was a party today, to the strength that was witnessed across Asian and European indices. This new found optimism has been fueled by reports that the Asian economies are likely to grow faster than most other economies in the world. While domestic demand in these countries has not weakened to the extent that they have in the developed markets, exports too will receive a boost what with the developed countries moving further towards full fledged recovery. In India's case, while exports do not form a large part of its economy directly, it nevertheless helps infuse a multiplier effect into the economy that contributes meaningfully towards its growth.
It may be difficult to estimate the impact of the same on the country's stock markets though. Most likely, it is already factored into the prices as save for a dramatic improvement in earnings, markets are not looking all that enticing even from a FY11 perspective. Of course, there would be pockets that could offer outsized returns to investors looking to invest with a 2-3 year perspective. In other words, a bottom up approach is likely to work better than a top heavy one.
Suzlon, the wind power equipment maker ended weak on the bourses today. This despite the fact that the company has won a significant 42 MW order from Australia's Infigen Energy. Interestingly, this is the second order from the company, taking the total order won to 183 MW and has come at a very opportune time for Suzlon, what with the company running into cash flow problems and being forced to resort to forced selling of assets that were once considered key for the company's long term ambitions. Before today's trade, Suzlon had been among the top losers on the Nifty in the past one month.