Market Analysis - 22nd March 2011

SENSEX - 17,988.30       +149.25 (0.84%)

NIFTY -     5,413.85         +49.10 (0.92%)

 

The Indian markets snapped out of a three day slide which was caused due to rising fuel prices, the problems in Japan, Africa and middle east. The BSE rose 149.25 points to close at 17988.30. The broader index Nifty climbed by 49.10 point to close at 5413.85. The market breadth was positive with gainers outnumbering the losers at 1.2:1

 

Sensex

 Nifty

 

 

The BSE Mid-Cap index rose 0.79% and the BSE Small-Cap index rose 0.54%. Both these indices underperformed the Sensex.

All the 13-sectoral indices on the BSE logged gains. The BSE Realty (up 2.19%), the BSE Auto (up 1.53%), and the BSE Healthcare (up 1.10%), outperformed the Sensex. The BSE IT (up 0.40%), the BSE FMCG (up 0.44%), and the BSE Bankex (up 0.39%), underperformed the Sensex.
 

 

High crude prices remain a concern for the country which imports two thirds of it oil demand. The shares of oil companies which have to sell oil at lower government fixed prices like Indian Oil, Bharat Petroleum and Hindustan petroleum fell today.

 

The macro picture isn't still comfortable with rising fuel prices and interest rates.

 

Auto shares rose after Maruti announced that the problems in Japan wont cause a long term disruption in parts supply. Maruti Suzuki, Tata Motors and Mahindra and Mahindra rose between 1.2 and 3.6 percent.

 

The government has formed an inter-ministerial committee under the chairmanship of chief economic advisor Mr. kaushik Basu, the committee has been formed to suggest short and long term measures to counter food inflation.

 

 

Banking shares saw mixed trend after the government moved banking sector amendment bill in parliament.

The government on Tuesday, 22 March 2011, sought parliamentary approval to amend a banking law for allowing investors in private banks to have voting rights proportional to their shareholdings, a long-awaited move to help grow the sector. Currently, the voting right of a single individual or entity in private banks is limited to 10%, irrespective of their shareholding. The bill, introduced by Finance Minister Pranab Mukherjee, also sought to raise the cap on investor voting rights in state-run banks to 10% from 1%, and lift the cap on state-run banks' authorised capital. 

Healthcare shares rose after the finance minister Pranab Mukherjee on Tuesday announced withdrawal of 5% service tax on air-conditioned hospitals with more than 25 beds and on diagnostic services. Apollo Hospitals Enterprise (up 0.42%), Fortis Healthcare (up 2.03%), and Lotus Eye Care Hospital (up 3.13%), gained. 

 

Oil prices eased a bit. US crude futures were down 15 cents a barrel or 0.15% to $102.18 a barrel. Oil prices have surged in recent months amid ongoing tensions in the oil-rich Middle East and North Africa region

 

European markets were mixed on Tuesday, 22 March 2011, as a strong finish on Wall Street offset worries that the foreign military intervention in Libya, together with continuing unrest in Yemen and Bahrain, will keep oil prices high. The key benchmark indices in UK and France were up 0.06% and 0.35%. Germany's DAX fell 0.04%. 

Asian stocks edged higher for a third day on Tuesday, 22 March 2011, as Japan made progress in stabilizing reactors at a crippled nuclear plant north of Tokyo. The key benchmark indices in China, Hong Kong, Singapore, South Korea and Taiwan were up by between 0.34% to 0.76%. Japanese stocks surged as trading resumed in Tokyo after a holiday-extended weekend and amid continued efforts by Japanese authorities to contain a nuclear crisis. The Nikkei 225 average jumped 4.36%. Indonesia's Jakarta Composite was down 0.03%.