Sharp recovery in late trade; FMCG, banks up, telecom dips

The markets showed sharp recovery in the late trade amid volatility. The Nifty recovered over 100 points from its day's low and closed above the 5,000 mark.Buying in FMCG, banking, metal and banking stocks supported the markets while telecom, technology, cement, realty and oil marketing companies' shares remained under pressure throughout the session.

The market opened on a positive note but within few minutes after opening it slipped in the red despite positive global cues. Recovery was seen in the last one hour of trade. Asian markets ended higher; Straits Times, Jakarta, Hang Seng and Taiwan Weighted gained 1-2%. Nikkei was up 0.18% while Kospi fell 0.5%. European markets went up over 1.5% and the US index futures gained 0.7% each, at the time of writing this report.

Short covering also aided the 50-share NSE Nifty to recover 106.35 points from day's low of 4,921.05, before closing the day at 5027.40, up 0.48% or 24.20 points. The 30-share BSE Sensex went up 92.13 points or 0.55%, to settle at 16,958.54, after seeing recovery of 336.49 points from day's low of 16,622.05. The Nifty October future ended with 14 points premium.

Telecom stocks remained under pressure for the second consecutive day. Brokerages downgraded stocks and raised concerns over their earnings. TRAI (Telecom Regulatory Authority of India) statment also impacted stocks today, which said per-second tariff could be compulsory. Bharti Airtel and Reliance Communications plunged over 10% while Idea Cellular fell over 8%. Their volumes compared to 5-day average increased 370%, 471% and 623%, respectively. MTNL and Tata Teleservices slipped 4-5%.

Volumes were very high in today's trade; total traded turnover was at Rs 1,16,249.05 crore as against Rs 79,766.65 crore on Monday. This included Rs 21,128.25 crore from the NSE cash segment, Rs 88,732.6 crore from the NSE F&O and the balance Rs 6,388.2 crore from the BSE cash segment.

In the FMCG space, HUL and Godrej Consumer shot up over 5%. ITC, Nestle, Colgate and Marico gained 2-3.5%. Banking stocks like Axis Bank, ICICI Bank, Bank of Baroda, Kotak Mahindra, HDFC Bank and SBI were up 1.3-3%.