makin97 NSETIPS @ RAKESH MAKIN: MARKET ENDED 28.06.2011 TUESDAY

WERE TODAY'S NIFTY GAINERS

MARKET ENDED 28.06.2010 TUESDAY

SENSEX 18492.45 +80.04

NIFTY 5545.30 +18.70

NASDAQ 2716.45 +28.17

UPDATEDTIME 09.28 PM 28 JUNE 2011

Indian markets ended a choppy session on a positive note for fourth consecutive session led by gains in healthcare, capital goods and auto stocks. According to analysts, the market is likely to remain choppy, after a short covering rally, till June series F&O expiry.

Indices had opened in the green in line with Asian peers but failed to hold on to gains and turned choppy. A positive opening of European markets, ahead of Greece's vote on austerity plan, helped the indices to gain momentum and close higher.

With the euphoria of fuel price hike over, investors focus is back on macro economic issues like inflation and interest rates. Finance Minister Pranab Mukherjee on his visit to the US said that inflation is one of the major problems for the Indian economy. He expects the inflation to be more than 6.5 per cent this year.

Experts are of the view that Indian market is likely to underperform for next couple of months due to inflation and higher interest rates.

"In the near term, the Indian market is likely to underperform and by near term, I really mean about maybe 3-4 months, possibly till the October-December quarter.

We were clearly anticipating peaking out of inflation by sometime in March-April, which did not happen. Inflation turned out to be a lot more stickier than we had anticipated and as a consequence, even the end to the RBI's tightening cycle, which we were expecting some time in the first quarter of this year, it now seems to be prolonged to sometime in the July-September quarter, maybe till around September.

So to that extent, we actually expect the RBI to tighten about twice more, maybe 25 basis points each. And to have the desired effect on inflationary expectations, it should perhaps be done in rapid fire succession in July and then again in September, which could obviously lead to some degree of underperformance. On top of that, we must not also forget that earnings estimates have been declining.

All eyes will be set on the June quarter results and progress of monsoon in India for direction.

National Stock Exchange's Nifty closed at 5545.30, up 18.70 points or 0.34 per cent. The broader index touched a high of 5558.30 and low of 5496.35 in trade today.

Bombay Stock Exchange's Sensex ended at 18492.45, up 80.04 points or 0.43 per cent. The 30-share index hit a high of 18527.45 and low of 18323.44 intraday.

Nifty future has been struggling to cross crucial zone of 5550-5600 levels. If it manages to cross 5600 then the rally may continue upto 5700-5750 levels. On the other hand, 5500 is likely to act as a strong support below which selling may intensify towards 5420 levels.

BSE Midcap Index was up 0.78 per cent and BSE Smallcap Index moved 0.60 per cent higher.

Amongst sectoral indices, BSE Healthcare Index was up 0.95 per cent, BSE Capital Goods Index gained 0.94 per cent and BSE Auto Index moved up 0.82 per cent. BSE Oil&gas Index moved 0.44 per cent lower, BSE Realty Index was down 0.33 per cent and BSE IT Index slipped 0.07 per cent.

Hindalco Industries (3.96%), Bajaj Auto (3.01%), Dr Reddy's Laboratories (2.42%), HDFC (2.13%) and BHEL (1.92%) were amongst the major Nifty gainers.

GAIL (-2.60%), DLF (-2.28%), ACC (-2.17%), BPCL (-2.10%) and Jaiprakash Associates (-1.46%) were the top losers.

Market breadth was positive on the NSE with 1493 gainers against 1399 losers.