Markets bounce back; Nifty above 8,200

The markets have opened the week and the May derivatives series on a strong footing tracking gains in the US markets and on the back of a short-covering rally post the sell-off witnessed in the past two weeks.

At 9:40am, the Sensex was quoting at 27,380, higher by 372 points or 1.3% and the Nifty was at 8290, up 108 points. The broader markets are also showing strength, with the midcap and smallcap indices gaining around a percent each at 10,482 and 11,077 respectively.

The BSE Sensex had dropped 426 points or 1.5% to end the past week at 27,011 and the Nifty had declined 123 points, or 1.4% to close below the 200-day moving average (DMA) at 8,181.

The debate on the Constitution Amendment Bill in respect of Goods and Services Tax (GST), the passage of the Land Acquisition Bill and the outcome of monthly manufacturing and services sector surveys will be keenly awaited. The next batch of March quarterly results will also dictate the trend on the bourses.

GLOBAL MARKETS

The Dow ended up 1.03% on Friday, while the S&P 500 gained 1.09% and the Nasdaq 1.29%.

However, the Asian share markets stumbled on Monday and the Australian dollar took a hit after disappointing news on Chinese manufacturing underlined the need for further policy stimulus in the world's second biggest economy.

The HSBC/Markit Purchasing Managers' Index (PMI) fell to 48.9 in April - the lowest level since April 2014 - from 49.6 in March, as demand faltered and deflationary pressures persisted.

Shanghai shares were off 0.6%, while the CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.3%.

SECTORS AND STOCKS

All the sectoral indices are trading in the green this morning, with the auto, metal and pharma indices seeing the most action.

The auto sector is in the limelight in early trades post the release of auto sale numbers. Maruti Suzuki has zoomed by 2.5% at Rs 3,826 to lead the gainer's list on the BSE after its domestic sales increased by 27.3% during the month to 1,00,709 units. M&M has jumped by 2% at Rs 1,168 and Tata Motors has edged higher by 0.7% at Rs 512.

In the metal space, Hindalco, NMDC, Vedanta and Jindal Steel have added between 1% and 2% each.

In the pharma space, Dr Reddy's, Divi's Lab and Wockhardt have added 1-2% each.

The Aditya Birla group stocks are in the focus after the Kumar Mangalam Birla-controlled group on Sunday announced a plan to merge its Aditya Birla Nuvo Ltd (ABNL)-operated fashion retailing business with Pantaloons Fashion & Retail. This will create India’s largest branded apparel player, valued at Rs 12,000 crore. Aditya Birla Nuvo has strengthened by 6.7% at Rs 1677 and Pantaloons Fashion & Retail has hit the upper circuit of 20% at Rs 136.

Infrastructure finance company IDFC has added 0.3% at Rs 168 after reporting a 48.17% jump in consolidated net profit at Rs 382.21 crore for the fourth quarter ended March 31, 2015.

The market breadth is strong. Out of 1,243 stocks traded on the BSE, there are 975 advancing stocks as against 227 declines.