Post Session- Sensex ends higher in volatile trade Analysis for May 17, 2012

The key domestic benchmarks ended higher in volatile trade today led by buying in FMCG and realty stocks. However, market sentiment remained weak as the Sensex erased most of its earlier gains as endless Eurozone worries and a rupee nearing an all-time low sparked selling in stocks in late trade.

Greece will hold elections next month amid growing speculation that the debt saddled economy is set for a Euro exit, deepening the region"s debt woes. Sentiment also weakened after the ECB cut funding to Greek banks, raising risks of a deepening contagion in Europe.

BSE SENSEX closed at 16,070.48, up by 40.39 points or by 0.25 per cent and the NSE Nifty ended at 4,870.2, up by 11.95 points or by 0.25 per cent.

The BSE Sensex touched intraday high of 16,240.18 and intraday low of 16,007.92 The NSE Nifty touched intraday high of 4,922.25 and intraday low of 4,850.2.

Meanwhile, the BSE MIDCAP closed at 5,880.57, up by 1.15 points or by 0.02 per cent, while the BSE SMLCAP ended at 6,270.36, up by 5.41 points or by 0.09 per cent.

After witnessing a gap up opening, the key domestic benchmarks extended gains and surged to the day"s high as firm Asian market cues lifted sentiment. Moreover, yesterday"s heavy sell-offs in stocks offered good buying opportunity at lower levels. The key domestic benchmarks pared gains in noon trade as the deepening worries over Europe"s debt turmoil came back to bite investors. Profit –booking at existing levels and weak European cues sparked selling in late trade, however the benchmarks held on to slender gains to close the day on a positive note.

On the Sectoral front, the FMCG and Realty gained 1.90 per cent and 0.89 per cent, respectively.

Out of the 30 Sensex stocks, there were 14 advances and 16 declines. The Market breadth, indicating the overall health of the market, was strong. On BSE out of total shares traded 3531, shares advanced were 1390 while 1384 shares declined and 757 were unchanged.

The top gainers of the BSE Sensex pack were ITC Ltd. (Rs. 235.20,+3.14%), Jindal Steel & Power Ltd. (Rs. 462.00,+2.30%), Housing Development Finance Corporation Ltd. (Rs. 632.80,+1.88%), DLF Ltd. (Rs. 184.85,+1.82%), Reliance Industries Ltd. (Rs. 685.10,+1.32%), among others.

Most Asian markets ended higher on Thursday amid signs of a pickup in global economic recovery. Sentiment was boosted after industrial output in the US rose by 1.1 per cent in April 2012, the fastest pace since December 2010, signaling a pickup in the nation"s economic recovery and boosting the outlook for Asian exporters. Moreover, minutes from the Fed meeting showed that the central bank may resort to further monetary easing to boost US economic growth. Shanghai Composite ended up 1.39 per cent, Hang Seng ended down 0.31 per cent and Nikkei 225 advanced 0.86 per cent.

Among the European bourses, CAC 40 was down 0.92 per cent, DAX was down 0.67 per cent and FTSE 100 was trading lower by 1.08 per cent at 16:41 PM IST.