Nifty has to close above 5,420 for uptrend to resume

Late buying amid a highly volatile session saw the indices closing in the positive. As we had mentioned yesterday that a rally is on the cards, the Nifty opened in the positive and made a higher high and higher low during the session. If the index closes above 5,420, it may to go up to 5,575. However, if the benchmark ends below 5,300, we may see it fall to the level of 5,270. The National Stock Exchange (NSE) saw a volume of 77.63 crore shares.

The market opened in the green supported positive cue from the global arena as the European Central Bank on Thursday announced a second fund infusion for European banks to cope up with the liquidity crunch. The Nifty opened 29 points up at 5,369 and the Sensex added 77 points to its previous close to resume trade at 17,661.

However, early profit booking led the indices into the red wherein they touched their intraday lows. At the lows, the Nifty slipped to 5,315 and the Sensex was down to 17,504. Buying interest in banking and capital goods stocks helped the market recover from the lows and venture into the positive terrain.

Continued buying interest saw the market hitting the day’s high in noon trade. At the highs, the Nifty rose to 5,393 and the Sensex moved up to 17,732 but a huge sell-off in the midst of volatile trade resulted in the market paring all its gains and slipping lower once again.

The indices fluctuated on both sides of the neutral line in the post-noon session. A recovery in the last half hour ensured a green close, albeit with small gains. The Nifty ended with a gain of 20 points at 5,359 and the Sensex settled at 17,637, up 53 points.

The advance-decline ratio on the NSE was almost balanced at 870:891.

While late buying helped the Sensex close higher, the broader indices lagged behind—the BSE Mid-cap index fell 0.12% and the BSE Small-cap index shed 0.09%.

The sectoral gainers were led by BSE Bankex (up 1.40%); BSE Healthcare (up 0.83%); BSE Capital Goods (up 0.58%); BSE Metal (up 0.16%) and BSE TECk (up 0.12%). The ones that ended lower were BSE Realty (down 2.39%); BSE PSU (down 0.66%); BSE Fast Moving Consumer Goods (down 0.37%); BSE Oil & Gas (down 0.34%) and BSE Auto (down 0.30%).

Sun Pharma (up 3.11%); Jindal Steel (up 2.15%); ICICI Bank (up 2.08%); Larsen & Toubro (up 1.66%) and NTPC (up 1.33%) topped the Sensex list. The key losers were DLF (down 5.03%); ONGC (down 2.22%); Hindalco Industries (down 1.86%); Bajaj Auto (down 1.56%) and Tata Power (down 1.34%).

The main gainers on the Nifty were Sun Pharma (up 3.04%); IDFC (up 2.85%); Jindal Steel (up 2.82%); Ambuja Cement (up 2.22%) and ICICI Bank (up 1.98%). The major laggards on the index were DLF (down 5.30%); Siemens (down 2.65%); ONGC (down 2.53%); Bajaj Auto (down 2.09%) and Hindalco Ind (down 1.96%).

The Asian pack closed in the positive following optimism from Europe after the ECB infused fresh funds into European banks, leading to hopes that the debt problems plaguing the continent would ease. Meanwhile core consumer prices in Japan fell 0.1% in January, implying that lower demand and a slowdown in economic growth has led to a deflation despite high energy costs.

The Shanghai Composite surged 1.43%; the Hang Seng advanced 0.81%; the Jakarta Composite climbed 1.07%; the KLSE Composite rose 0.66%; the Nikkei 225 gained 0.72%; the Straits Times gained 0.49%; the Seoul Composite added 0.22% and the Taiwan Weighted was 0.32% higher.

Back home, foreign institutional investors were net sellers of shares totalling Rs 126.52 crore and domestic institutional investors were net sellers of stocks amounting to Rs9.97 crore on Thursday.

With less than a month for the current financial year to end, Rural Electrification Corporation’s board of directors today approved raising Rs1,500 crore through tax-free bonds with an option to retain double that amount of oversubscription. The company proposes to issue tax-free secured redeemable non-convertible bonds of face value of Rs1,000 each, in the nature of debentures, during 2011-12, with an option to retain oversubscription up to an aggregate amount of Rs3,000 crore. The stock fell by 0.31% to close at Rs207.50 on the NSE.

REpower Systems SE, a wholly-owned subsidiary of Suzlon Energy, has signed an agreement with a consortium of banks headed by BayernLB, Commerzbank AG and Deutsche Bank AG for a syndicated loan of 750 million euros (Rs4,921-crore). The loan, which has a term of 2.5 years, enables REpower to secure follow-on financing early for credit facilities of 600 million euros agreed in May 2009. Suzlon tanked 2.02% to settle at Rs29.05% on the NSE.

Puravankara Projects plans to raise Rs150 crore through the sale of non-convertible bonds to garner funds for a housing project in Bangalore and also for the repayment of debt. Puravankara expects to pay 17% interest rate to investors. The scrip settled at Rs74.05 on the NSE, down 2.63% from its previous close.