Nifty will move between 5,360 and 5,190

Positive opening on the Asian bourses and an overnight rally in the US ensured that domestic markets opened in the positive and hit the highest intra day high since 9 November 2011. The positive move is on the back of news of growth in the manufacturing activity the US, India and China, thus fuelling optimism the global recovery. In yesterday’s closing report we mentioned that the Nifty may oscillate between 5,130 and 5,290, with a downward bias. The index reached exactly the upper end of the range today. The benchmark will have to sustain above today’s high to reach the level of 5,360; else we may see it going down to level of 5,190. The National Stock Exchange (NSE) saw its highest volume since beginning of January 2012 of 113.29 crore shares.

Today’s upmove was dented with the Supreme Court’s verdict in 2G telecom scam, when the Court ordered the Department of Telecommunications (DoT) to cancel all the 122 mobile telecom services licenses it allotted after January 2008. However, the index recovered smartly from this, proving that big buyers are eager to buy the dips.

The Sensex opened at 17,438 and the Nifty opened at 5,272. They immediately hit the intra day high at 17,504 and 5,290. After the Supreme Court verdict, the indices hit their intraday low at 17,308 and 5,226, close to yesterday’s closing. The Sensex closed at 17,432, 131 points up (0.76%) while the Nifty closed at 5,270, 34 points up (0.65%), their highest close since 8 November 2011. The advance-decline ratio on the NSE was 1008:753.

Among the broader indices, the BSE Mid-cap index surged 0.55% and the BSE Small-cap index climbed 0.54%.

Except for BSE Healthcare (down 0.62%), BSE Consumer durable (down 0.38%), BSE FMCG index (down 0.26%); all other BSE sectoral indices ended in positive, with the major gain in BSE TECk index which surged 2.08%. Other top five sectoral indices include, BSE IT (up 1.53%), BSE Metal (up 1.40%), BSE Capital goods (up 1.35%) and BSE Realty (up 1.25%).

The top five positive performers in the Sensex pack were, Bharti Airtel (up 6.88%); DLF (up 4.05%); Sterlite Industries (up 3.90%); Wipro (up 3.46%); GAIL (up 3.15%). Cipla, which fell 2.53% was at the bottom of the pack. ITC (fell 1.36%), Jindal Steel (fell 1.05%), Tata Motors (fell 0.99%) and Sun Pharmaceutical (fell 0.86%) were among the bottom five negative performers. Sensex had 21 stocks in the positive, while 9 stocks which fell in negative

Essar Ports posted over five-fold jump in consolidated net profit to Rs44.98 crore for the quarter ended December 31, 2011, largely due to increased realisations from its operations. The company reported a net profit of Rs8.21 crore during the corresponding quarter of 2010-11. Net operating income of the company increased by 48% to Rs271.94 crore vis-a-vis Rs183.51 crore reported in the Q3 of last fiscal. Essar Ports rose 2.41% to close at Rs65.80 on the BSE.

NTPC said that it is in talks with GAIL (India) for signing a long-term pact for sourcing imported gas for its plants, provided it finds buyers for the electricity produced from those plants. NTPC rose 0.53% to close at Rs171.65 on the BSE while GAIL rose 3.15% to close at Rs388.35 on the BSE.

The FIIs are pouring money into India again. They had invested Rs1676.49 crore on Tueday, 1 February 2012. US indices ended in positive on Wednesday after manufacturing data showed growth. Except for Strait Times (fell 0.13%) all the Asian indices ended in positive. Hang Seng rose 2% followed by Shanghai Composite (1.96%), Taiwan Weighted (1.37%), Jakarta Composite (1.31%) and  Seoul Composite (1.28%). However on the flip side, ratings agency Moody's Investors Service expects negative ratings trend for Asian corporates, indicating there will likely be more ratings downgrades than upgrades this year.  They expect defaults by Asian companies are likely to rise this year as the economic environment deteriorates and credit becomes tighter with European lenders reducing their exposure to the region.

However for some positive news, discussions between Greece and its creditors continue to progress. The Greek government is “one step from closing” a debt-swap deal with private bondholders, Finance Minister Evangelos Venizelos told reporters in Athens yesterday. The US index futures were trading in the positive.