The markets bounced back recovering from the aftershock of the London bomb blasts. The day opened with a huge positive gap as the damage from the blasts turned out to be much lower than expected. Most analysts in Europe and US do not expect the terrorist attack to have much of an impact on the financial markets as they start focussing on the earnings season ahead.

The rebound in the US markets towards close yesterday also helped to reinforce this sentiment.

The up trend was short-lived though as the indices lost most of their gains and went back very close to yesterday's closing levels within an hour or so. ONGC, which was trading with gains in the morning, declined and added to weakness in the indices.

The indices started a steady recovery by early afternoon as some buying emerged. The fact that the overall market breadth remained very positive encouraged the traders to take a more positive view.

Strength in metals, banks, telecom and media stocks helped the indices to recover part of yesterday's losses.

Sensex closed at 7212, a gain of 67 points, and the Nifty at 2196, a gain of 17 points. Nifty July futures discount to the spot index narrowed to 12 points from yesterday's 21 point.

Zee Tele, Bharti and Tata Steel were among the major gainers among Nifty stocks while ONGC, BPCL and HPCL were the major losers.

After a weak opening following the London blasts, US markets recovered and closed with gains yesterday. Though there was some initial panic after the large decline in most European markets, traders were of the view that the incident does not pose much threat to US economic performance. The Dow and NASDAQ closed with gains of close to one third of a per cent.

Crude futures for August delivery crashed more than 4 per cent after news of the terrorist attack in London. The commodity recovered later and closed the day with a loss of less than a per cent at $60.73 to a barrel yesterday. Crude is seeing a fresh rally in Asian and early European trades today and NYMEX grade crude is very close to its all time high of over $62.

Most Indian ADR's had a weak day despite the late bounce back in the broad indices. Technology stocks Infosys, Wipro and Satyam all ended with losses. HDFC Bank, Tata Motors, MTNL and Dr. Reddy's also closed with losses. ICICI Bank and VSNL closed with gains of over a per cent each.

Inflation for the week ended 25 June rose marginally to 4.14 per cent from 4.1 per cent reported for the previous week.

Bharti Televentures surged over 7 per cent in late afternoon trades after reports that the company has added almost 4.5 lakh subscribers during June. The stock closed with gains of 5 per cent.

Zee Tele has been one of the best performers for the last few days on expectations of higher popularity for some of its new programmes. The stock which opened firm surged more than 7 per cent in late afternoon trades. The stock closed over 6 per cent higher.

Reliance Capital has reportedly set up a separate division, to be called R Trade, for retail distribution of financial products. This division will sell insurance products, mutual fund schemes and other financial products.

Metal stocks continued to seek higher ground on expectations of a rebound in product prices. Tata Steel has been one of the prominent gainers in this rally and the stock managed to close with gains for the third successive day. SAIL also closed with gains.

Smaller steel companies like Essar Steel, Ispat Industries and JSW Steel also closed with good gains.

Mid-Cap Action

Mid-caps continued their strong run today as well and the CNX Mid-Cap 200 index closed at 3145, very close to its life-time high.

Small private bank stocks were the flavour of the day with many of them soaring to post new 52-week and life-time highs today. The huge buying interest was on intense speculations about mergers, stake sales to foreign banks and acquisitions by domestic corporate groups.

Karnataka Bank, which had seen a 20 per cent jump a few days back, surged over 10 per cent today on rumours of stake sales to one or more foreign banks. The stock was very active in the futures segment as well.

Among the other private banks which surged today include Federal Bank, which posted a new life-time high, and South Indian Bank. If rumours are to be believed, some of the south based banks are discussing mergers.

Titan Industries saw a sharp jump today and closed with gains of over 8 per cent. The stock has been steadily going up for the last couple of weeks. The current market fancy for retail stocks is helping the up surge in Titan.

Most of the media stocks continued their frenzied run today as well. The strength in frontline media stock Zee Tele rubbed off on smaller broadcasting stocks as well.

Television Eighteen led the pack with gains of well over 6 per cent, followed by NDTV which closed over 2 per cent higher. TV Today had a volatile day moving in and out of red and finally closing with gains of under a per cent.

Print media company Deccan Chronicle surged after the company announced that its board will meet shortly to consider an overseas issue or private placement. The company is planning to issue up to 9 per cent of its present capital base.

Entertainment stocks also had a good run. Multiplex cinema operator Shringar Cinema remained firm through out the day and closed with gains of over 13 per cent. Adlabs jumped in the closing minutes and gained over 6 per cent in no time.

Kinetic Engineering gained 20 per cent in early trades before giving up part of the gains on reports of a rights issue proposal.

Patni Computer announced that its board will meet shortly to discuss a sponsored ADR issue. The stock closed with gains of over 2 per cent.

Mid-cap software company Scandent Solutions surged over 5 per cent in late afternoon trades after reports of the company making an acquisition in France.

Apollo Hospitals completed its GDR issue to raise $65 million. The GDR was issued at a marginal discount to yesterday's closing price in the domestic market.

The second largest IT education company Aptech gained over 10 per cent on renewed buying interest. The stock had attracted the attention of overseas investors after its Chinese operations reported good growth.

Nicholas Piramal announced the acquisition of a 17-per cent stake in a Canadian biotechnology research and manufacturing company. Nicholas Piramal will get the exclusive marketing rights for the Canadian company's products in India and some parts of Asia.

Jyoti Structures, Cheslind Textiles and Genus Overseas were among the best performing stocks among mid-caps.

Thiru Arooran Sugars, Provogue and GM Breweries were among the significant mid-cap losers.

*Disclaimer: The author does not have any position in the stocks specifically mentioned above at the time of writing this article. This analysis / report is only for the purpose of information and is not an investment advice. Readers are advised to consult a certified financial advisor before taking any investment decisions. While efforts have been made to ensure the accuracy of the information provided in the content the author or publisher shall not be held responsible for any loss caused to any person whatsoever.

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