Watch if the market closes above today’s high for a short rally

While the market pared its gains in the second half of trade on a weak rupee, a minor bounce-back in the last hour ensured a positive close. Yesterday we had mentioned that if the Nifty manages to hold itself above the day's low we may the see the index going up to the level of 4,910. Today the index managed a higher high and a higher low, showing the benchmark's resistance to fall further. If this behaviour continues, we may soon see some gains. The National Stock Exchange (NSE) saw a lower volume of 49.71 crore shares.

The market opened in the positive tracking the firm Asian benchmarks in morning trade as G7 (Group of Seven) finance ministers are expected to hold a conference call later in the day to discuss ways to end the spiralling Eurozone crisis. The Nifty opened 21 points up at 4,869 and the Sensex opened above the 16,000 level at 16,065, a gain of 77 points over its previous close.

A minor bout of profit booking in early trade amid a fair amount of volatility saw the indices dipping to their intraday lows at around 9.40am. At the lows, the Nifty went down to 4,864 and the Sensex retracted to 16,023.

Bargain hunting at lower levels lifted the market higher in subsequent trade helping the benchmarks in the noon session. At this point, the Nifty touched 4,899 and the Sensex rose to 16,138.

The HSBC India Services Purchasing Managers Index (PMI)-an index of Indian services sector activity-bounced to a three-month high of 54.7 in May from 52.8 in April, driven by robust growth in new orders and optimistic business outlook.

A mixed opening of the European markets and an 18 paise fall in the rupee to 55.84 resulted in the market losing steam and paring its gains to touch the previous day's close in post-noon trade.

However, the market managed to claw back from the lows in the last hour and ensured a green close. The Nifty settled 15 points higher at 4,863 and the Sensex finished the day at 16,021, a gain of 32 points.

The advance-decline ratio on the NSE was positive at 848:750.

Among the broader markets, the BSE Mid-cap index gained 0.33% and the BSE Small-cap index rose 0.21%.

BSE Capital Goods (up 2%) topped the sectoral gainers. It was followed by BSE Bankex (up 0.82%); BSE Power (up 0.80%): BSE Oil & Gas (up 0.71%) and BSE Healthcare (up 0.39%). The top losers were BSE Realty (down 1.37%); BSE Fast Moving Consumer Goods (down 1.09%); BSE Consumer Durables (down 0.67%); BSE Metal (down 0.27%) and BSE Auto (down 0.21%).

The key gainers on the Sensex were Larsen & Toubro (up 3.08%); NTPC (up 1.98%); State Bank of India (up 1.66%); Hindalco Industries (up 1.60%) and BHEL (up 1.47%). The losers were led by Tata Motors (down 3.15%); Bharti Airtel (down 2.58%); ITC (down 1.89%); DLF (down 1.48%) and Coal India (down 1.09%).    

L&T (up 2.94%); Grasim Industries (up 2.72%); Reliance Infrastructure (up 2.71%); IDFC (up 2.57%) and Cairn India (up 2.33%) topped the Nifty. The main laggards were Ambuja Cements (down 3.29%); Tata Motors (down 3.17%); Siemens (down 2.64%); Bharti Airtel (down 2.31%) and ITC (down 2.22%).

Markets in Asia closed in the positive on hopes that the G7 would come up with plans to curb the debt problems plaguing Europe. Investors are also speculating that the US Federal Reserve might announce some initiatives on pressures in the jobs market.

The Shanghai Composite added 0.15%; the Hang Seng rose 0.40%; the Jakarta Composite advanced 1.73%; the KLSE Composite gained 0.33%; the Nikkei 225 climbed 1.04%; the Straits Times rose 0.50%; the KOSPI Composite surged 1.05% and the Taiwan Weighted settled 1.53%.

At the time of writing, the CAC 40 of France rose 0.47%; Germany's DAX was down 0.87% while FTSE 100 of Britain was closed for the Queen's Diamond Jubilee celebrations. On the other hand, US stock futures were trading in the red.

Back home, foreign institutional investors were net sellers of shares totalling Rs637.14 crore on Monday while domestic institutional investors were net buyers of equities aggregating Rs446.23 crore.

Wind turbine major, Suzlon Energy, has launched a new machine designed for low wind speed sites. Featuring a rotor diameter of 111 metres and a swept area of more than 9,500 square metres, the S111 is the latest generation of Suzlon's 2.1 MW fleet. The product was launched at Windpower 2012 in Atlanta. Suzlon Energy closed at Rs17.15 on the NSE, down 0.58% from its previous close.

Jet Airways is set to launch a second service between Mumbai and Kuwait from 8th June. The new service will operate four flights per week to the Gulf destination. With this launch, Jet Airways will now offer 11 flights a week from Mumbai to Kuwait. The stock declined 0.41% to close at Rs317 on the NSE.

IT services provider Subex has successfully completed the TM forum business metrics automation certification on their ROCware platform. The product has been successfully certified against business metrics automation interface version 1.0 and the revenue assurance metric groups in the Business Performance Measurement System Version 5.6. The stock gained 0.22% to close at Rs22.65 on the NSE.