Equity Markets rise in Bear Market Rally, Upswing may not last long.

Category: Equity Trading | Forex Trading | Nifty
June 7, 2012 | Comments Off |
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Equity Markets rise in bear market rally, Upswing may not last long.

Indian Equity markets witnessed a spectacular rally on Wednesday, on hopes of rate cut by the RBI. Positive global cues and Prime Minister’s meeting with key ministries today evening helped markets stay higher. U.S.equity markets rose, sending benchmark indexes toward their biggest gains in 2012, on speculation global policy makers will act to revive a slowing economy.

 Nifty June Futures, till above 4914 may now remain positive & rises to 5113-5122 can be expected. A strong & sustained further momentum above 5122 may push markets further up to a very strong resistance range of 5230 to 5275. Selling pressure can be expected on all rises above 5122 till 5275. A sell on rises would be an ideal strategy for the longer term though for the Intraday traders, buying would seem very lucrative. Equity markets are not yet out of the Bearish mood & further higher volatility for the downside will soon set in. Nothing has drastically changed for the better overnight & pessimism is globally being felt.

Indian Equity markets rose for the third straight day today, 6 June 2012, on expectations that Prime Minister Manmohan Singh’s meeting with ministers later in the day would result in fresh steps to boost the sagging infrastructure sector. Expectations of government action have risen amid gathering signs of a rapidly slowing economy. Gains in world stocks aided rally in Indian shares today, 6 June 2012. World stocks rose on expectations of an announcement from the European Central Bank (ECB) later in the global day of a schedule for an additional long-term refinancing operation (LTRO) as insurance against a further flight of bank deposits inEurope.

The 50-unit S&P CNX Nifty piled on a whopping 133 points to close just shy of the 5,000 level in late trade. The barometer index, BSE Sensex, too stood out with a 433 point gain to end the day at 16,454.

Broad equity market indices ended higher as the BSE Midcap and Small Cap indices gained 1.78% and 1.48% respectively. Market breadth was positive as the A/D ratio was 2.07:1 on the BSE. NSE cash turnover was Rs.11,665crs. Vs. Rs.8,587crs. in the previous session. All the sectoral indices ended higher. The top gainers were the BSE Auto, Capital Goods, Power, Bankex and FMCG indices. The top gainers from the BSE 30 were Tata Motors, LT, Jindal Steel and Hero Moto Corp. There were no losers.

Interest rate sensitive auto stocks rose on hopes Reserve Bank of India (RBI) will cut interest rates at mid-quarter monetary policy review on 18 June 2012 to prop up slowing economy after data released by the government last week showed India’s economy grew 5.3% in Q4 March 2012, its slowest pace of expansion in nearly a decade. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.

U.S. equity markets rose, sending benchmark indexes toward their biggest gains in 2012, on speculation global policy makers will act to revive a slowing economy. All 10 groups in the S&P 500 rose today as commodity, financial and technology shares had the biggest gains. The Standard & Poor’s 500 Index rose 2% to 1,310.52 at 12:43 p.m.,New Yorktime, the most, on a closing basis since December 2011. The gauge has rallied 2.5% in 3 days. The Dow Jones Industrial Average added 228.22 points, or 1.9%, to 12,356.17. Trading in S&P 500 companies was up 7.3% from the 30-day average at this time of day. Equities gained as European Central Bank (ECB) President Mario Draghi said officials stand ready to act as the euro region’s growth outlook worsens.


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