Stock markets ended on a high note after crude prices eased up and fallen to 100 dollars per barrel. BSE Sensex closed at 18439.48 up by 265.39 points and NSE Nifty closed at 5531.50 up by 86.05 points. Rise in stock market came as a breather for the investors who were having a tough time. Rally was mainly led and contributed by heavyweights like Reliance Industries, HDFC, TATA steel, Infosys and ICICI Bank.
Crude Prices came down to $ 100/barrel after several refineries in Japan were shut down due to devastating Tsunami and earthquake. Traders believed that oil prices will remain lower for sometime as demand will fall after such a event. Oil and Gas stocks also witnessed buying after this fall.
There was buying across sectors in most of the frontline stocks. But this rise can be short term and as situation in Japan stabilizes over next few weeks, crude prices may again pop up resulting in panic in market. Inflation stood at 8.3 per cent on YOY basis, which is above acceptable limits. So, the factors are still suspicious and short term investors should these rallies to cover their losses and exit their positions.
High inflation and once crude prices go back to their old levels will result in selling in same stocks where we are witnessing buying at this moment. Crude prices are the biggest factor in short term for the markets and there are not any significant changes in geo-political situation, which can really bring down the crude prices substantially to help markets.
but nevertheless, any rally is a breather and should be used by investing community to trade. So, this rally can also be used for booking profits as well as covering losses.
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