Tuesday 10 January 2012

National Stock Exchange's Nifty broke out of the narrow trading range

The National Stock Exchange's Nifty broke out of the narrow trading range of last few sessions and closed above intermediate resistance levels as sentiments turned bullish following Moody's upgrade of India's short-term foreign currency rating from speculative to investment grade. Rally in the European peers and hopes of rate cut by the Reserve Bank of India also helped the benchmarks to gain momentum.

According to analysts, the market trend seems to have turned bullish in the near term and if quarterly earnings and global markets don't disappoint, further upside can be expected in next few sessions. However, they don't expect the RBI to hike rates so soon.

"The markets were in over-sold zone, finding buying interest from value pickers. Further, news that Moody's upgraded Indian sovereign ratings is a big positive to the overall sentiment. Lastly, the results which started with IndusInd Bank, has commenced on positive note, as IndusInd Bank has beaten the market estimates.

Even, technicals are also indicating that Nifty is in short term uptrend and will see the first resistance at about 5000 level," said D K Aggarwal, CMD, SMC Investments and Advisors.

The Nifty closed at 4849.55, up 106.75 points or 2.25 per cent. It touched a high of 4855.90 and low of 4768.25 in trade today.

The Bombay Stock Exchange's Sensex ended at 16165.09, up 350.37 points or 2.22 per cent. The 30-share index touched intraday high 16180.97 and low of 15898.32 intraday.

"Even bear markets have substantial sharp pullback rallies. So on the Nifty unless we start closing above the 200 DMA I would not say that the bear market is over. Sure you can cross a few intermediate tops and a large intermediate rally can look like as if everything has turned (positive). You could still have 100-150 points on the upside for starters and then we have to take it as it comes.

Once complacency sets in, once people go around hunting for good news that is when you become careful and market could suddenly turn. The news flow could suddenly become adverse but this result season, most of the time we will be talking about it, is not as bad as expected so that will take the market higher," said Ashwani Gujral, Fund Manager, Ashwanigujral.com.

BSE Midcap Index was up 2.24 per cent and BSE Smallcap Index moved 2.63 per cent higher.

Amongst the sectoral indices, BSE Realty Index was up 4.20 per cent, BSE Capital Goods Index moved 3.56 per cent higher, BSE Bankex gained 3.17 per cent and BSE Metal Index was up 2.96 per cent.

Reliance Power (5.80%), Punjab National Bank (5.24%), Mahindra & Mahindra (5.08%), Reliance Infrastructure (4.67%) and Hindalco Industries (4.37%) were the major Nifty gainers.

Ranbaxy Laboratories (-0.94%) and Tata Consultancy Services (-0.12%) were the only index losers.

Market breadth was positive on the NSE with 1287 gainers against 215 losers.
News bureau,

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