Nifty rebounds, ends above 5500; IT, banks up
08 Mar 2011
Indian equity benchmarks bounced back sharply on Tuesday to regain majority of yesterday's losses. The Nifty too clawed back above the 5500 mark supported by a rally in technology, telecom, financial, oil & gas and metal companies' shares as well as short covering.
India stands out to be an exception, says Ajay Kapur, Head of equity strategy for Asia at Deutsche Bank. "Indian fundamentals seem to be getting better in the near-term with its reform agenda likely to play out in 2011-12. Also fundamentals of corporate India too look good," Kapur said.
The market may trade in a range of around 5200 to 5600-5650, says Devang Mehta, vice president and head - equity sales, at Anand Rathi Financial Services. "There are a lot of factors, which are worrying currently like the crude situation and the tension that is mounting in the Libyan region. Added to this, political uncertainty has crept in domestically. But more or less it seems that there are lots of parties that are willing to support the ruling UPA government."
Political instability and rising crude oil prices, that dragged the markets down in yesterday's trade, have already been factored-in. There was continued buzz however that Congress and its UPA ally DMK may patch-up on the seat-sharing issue for forthcoming Tamil Nadu election.
However, global markets were still concerned over crude prices with continued tension in Libya. Crude oil climbed above USD 105 a barrel on NYMEX again and London Brent crude too turned back above the USD 115 per barrel mark.
On the back of the Middle East North Africa (MENA) crisis, Jonathan Barratt, MD, Commodity Broking Services says that even if the Libyan crisis quietens down, Algeria is the next country to watch out for from that region, as it produces around 2 million barrels of crude. "We feel that if the unrest starts to spread to Algeria, then we do have slightly more concerns because Algeria has a similar form of government to Egypt," he adds.
