A strong move may have started. But wait for intraday corrections to buy. If the Nifty closes above 5,020 tomorrow we may see the index reaching 5,200
 

Hopes of a rate cut by the Reserve Bank of India (RBI) in its policy meeting later this month and strong global cues helped the market close higher for the third day in a row. Yesterday we had mentioned that if the market closes above the day's high, we may see a short rally. Today, the Nifty's intraday high of 5,010 was its best in the last six days (including today), but the index closed slightly below that level. Also, the benchmark recorded its highest percentage gain of 2.75% since 3 January 2012. If the Nifty manages to close above 5,020 tomorrow, we may see the index reaching the level of 5,200. The volume of 68.48 crore shares on the National Stock Exchange (NSE) was higher than its 10-day moving average.

The Indian market opened on a firm note on positive cues from across the world. Markets in the US closed higher on better-than-expected ISM data, which showed that the index for non-manufacturing business rose to 53.7 in May from 53.5 in the previous month. Reflecting the US sentiment, the Asian pack, with the exception of the Chinese benchmark, was up in morning trade. Asian markets were also supported by comments from the G7 leaders who agreed to synchronise their actions to the European debt crisis.

The Nifty opened 24 points higher at 4,887 and the Sensex added 79 points to its previous close to resume trade at 16,100. The opening figures on both the benchmarks were also their intraday lows.

Across-the-board buying led by banking, fast moving consumer goods and technology stocks helped the market move to a higher trajectory. Speculations that the Reserve Bank of India (RBI) would look at a rate cut on the back of easing of global crude prices also supported the gains.

Meanwhile, the rupee appreciated by 11 paise to 55.53 against the dollar in early trade, supported by a higher opening on the stock market amid selling of the greenback by exporters. The rupee had closed flat at 55.64 on Tuesday.

The benchmarks extended their gains in the noon session as the key European indices were in the green. The market hit its intraday high at around 3.00pm with the Nifty touching 5,010 and the Sensex climbing to 16,495.

The market pared a small portion of its gains and closed off the day's high. The Nifty added 134 points (2.75%) to settle at 4,997 and the Sensex jumped 434 points (2.71%) to finish at 16,454.

The advance-decline ratio on the NSE was in favour of the gainers at 1308:384.

Among the broader markets, the BSE Mid-cap index climbed 1.78% and the BSE Small-cap index advanced 1.78%.

Today's rally saw all sectoral gauges closing higher. BSE Auto (up 3.86%); BSE Capital Goods (up 3.63%); BSE Power (up 3.49%); BSE Bankex (up 3.01%) and BSE Fast Moving Consumer Goods (up 2.95%) were the top gainers.

Tata Motors (up 5.71%); Larsen & Toubro (up 4.77%); Jindal Steel (up 4.63%); Hero MotoCorp (up 4.29%) and Sterlite Industries (up 4.06%) led the Sensex today. There were no losers on the index.

The top gainers on the Nifty were Tata Motors (up 5.41%); Hero MotoCorp (up 5.08%); Jindal Steel (up 4.87%); Reliance Infrastructure (up 4.62%) and Ambuja Cements (up 4.59%). Cipla (down 0.34%); BPCL (down 0.26%) and Dr Reddy's Laboratories (down 0.21%) were the losers on the index.

Markets in Asia, with the exception of the Shanghai Composite, closed higher on global optimism. Better-than-expected services data from the US and assertion by G7 leaders on Tuesday that they would coordinate efforts to help countries like Spain and Greece ease their liquidity problems.

The Hang Seng climbed 1.43%: the Jakarta Composite jumped 3.32%: the KLSE Composite rose 0.58%; the Nikkei 225 surged 1.81%; the Straits Times advanced 1.79%; the KOSPI Composite gained 1.05% and the Taiwan Weighted closed 0.80% higher. Bucking the trend, the Shanghai Composite lost 0.10%.

At the time of writing, the key European indices were trading with gains of 1.38% to 2.03% and the US stock futures were in the green.

Back home, foreign institutional investors were net sellers of stocks totalling Rs680.86 crore on Tuesday while domestic institutional investors were net buyers of shares amounting to Rs794.65 crore.

Alstom T&D India today said it has bagged a contract worth Rs41 crore from Power Grid Corporation for setting up transmission network at Daltonganj in Jharkhand. The contract envisages supply, erection and commissioning of the substation. Alstom T&D surged 2.32% to close at Rs171.90 on the NSE.

Pharma major Dr Reddy's Laboratories has entered into a pact with Merck Serono, a division of Germany-based Merck KGaA, to co-develop biosimilar compounds. The tie-up will focus mainly on monoclonal antibodies in the oncology segment. The deal will also cover manufacturing and commercialisation of the compounds. The stock settled at Rs1,615 on the NSE, down 0.21% from its previous close.

Credit rating agency, CARE has assigned 'BBB' rating to Reliance Mediaworks' Rs45 crore Non-Convertible Debentures (NCD) programme, the rating agency has reaffirmed 'AAA(SO)' rating to the company's NCD programme worth Rs350 crore. The stock closed at Rs53 on the NSE, up 3.82% over its previous close.