The stock markets managed to retain a part of early gains to close in the green on Friday. This was on the back of improved global cues following a statement by European Central Bank president President Mr Mario Draghi stating that the ECB was ready to do whatever it takes to preserve the euro.

However, the gains in the Indian markets were limited on account of poor asset quality performance by PSU banks in the quarter ended June 2012 dampening sentiment. Stocks of major PSU banks including SBI and PNB fell by between 3 to 7 per cent with Union Bank falling the most by 7.86 per cent on the BSE on Friday.

The Sensex closed at 16,840, up 200 points or 1.2 per cent while the Nifty ended the day at 5,100, up 57 points or 1.13 per cent. The rally was led by movement in metals, FMCG and IT. However realty, capital goods , PSU and healthcare sectors were worst hit.

Head of PCG (Private Client Group) Research, Kotak Securities Mr. Dipen Shah said : “The benchmarks ended a volatile day with a near one per cent gain. The markets started higher on the back of supportive global cues. Markets gained further as a few results came in better than expected, especially ICICI Bank. However, profit booking in the latter half erased some of the gains. PSU banks were lower after disappointing asset quality data from some of the larger PSU banks.”

Volatility was up with the India VIX closing up 0.43 per cent at 16.44.

Sterlite, Tata Steel, Tata Motors, HDFC Bank and Sesagoa were the top Nifty gainers while PNB, Bank of Baroda, JP Associates and Kota Bank were the losers on the Nifty.

Also read: Bank stocks move in opposite direction

Also read: Soaring indices hide market pain

(This article was published on July 27, 2012)
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