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Wall Street dismissed the continous negative news flow and ended the day in green with Dow Jones gaining nearly 90 points and Nasdaq closing up nearly 21 points. Tech stocks led by Hewlett-Packard(up 8 percent) took the bears by surprise. Earlier in the day the indices are bleeding due to rise in consumer prices and lackluster readings on home construction. In the volatile trade Dow gained 240-points up from the lows of the day. Fed minutes also revealed the possibility of quick rate hikes once economic growth resumes. We still wait for Dow Jones to cross over 12,750 levels to declare a Bull Zone.
On the commodities front Gold and Crude continued to breached their previous highs today.
Japanese markets jumped on positive news with Nikkei currently moving up 278 points to 13, 588.70 at the time of writing. We mentioned couple of days back that Japanese markets have formed a bottom near Nikkei 13,000 levels. From the data available FII’s are seen buying in the Japanese markets. The country’s export growth quickened and last week surprised analysts with the GDP numbers on the upside.
Back home Indian Markets appear more concerned about US Economy, than the Wall Street. Any negative news across the globe is taken as advantage by the market players to short the market heavily. This implies we have a show on the cards with shorts still in play and any major upswings will push the Sensex wildly further. But technicals will support the rally only above 19.240, till then it is a cat and mice play.
Rupee is getting weaker and this augurs well for Technology stocks and other export oriented stocks like Textiles and Auto ancillaries. Yesterday’s weak trade shows the promise in these sectors. Midcap IT showed strength on Tuesday and were silent yesterday. Today we expect them to fire again. PE funds are looking actively looking in the logistics space (Blackstone buys 10 percent stake in Allcargo). We like another stock here(Leader in Logistics).
Markets are likely to trade up with minor bouts of volatility and with strength appears tilting towards Bulls. Have a great trading day.
— Review written by Research Team @ www.indiabears.com