Reversal possible if the Nifty closes firmly above 5,376 tomorrow

Value picking by institutional investors, after a steep decline in the previous session, enabled the market snap its four-session losing streak. Today the benchmarks were able to recover more than half the losses suffered yesterday. However, this may not be taken as a reversal. For a reversal to be seen, the Nifty should close firmly above today’s close of 5,376. If the downtrend continues, we may see the index moving in the range of 5,150 and 5,400. The National Stock Exchange (NSE) saw a volume of 86.10 crore shares.

The local market, which recorded a sharp fall yesterday, bounced back this morning as investors resorted to bargain hunting at lowers levels and on positive cues from the Asian pack. Banking, realty and metal sectors, which were badly mauled in the previous session, witnessed good buying interest today. The Nifty opened trade at 5,311, up 30 points, and the Sensex rose 99 points at the opening bell at 17,545.

The market touched its intraday low in initial trade itself with the Nifty falling to 5,306 and the Sensex going back to 17,530. However, no damage was done as the indices resumed their upmove in subsequent trade. Across-the-board buying resulted in 12 of the 13 sectoral gauges trading in the positive in morning trade.

A firm opening of the key European indices helped the local benchmarks extend their gains in post-noon trade and scale their intraday highs. At the highs, the Nifty touched 5,391 and the Sensex rose to 17,777.

Snapping the four-day decline, the market settled with good gains but off the day’s high. At the close, the Nifty gained 94 points at 5,376 and the Sensex finished at 17,731, a jump of 285 points.

The advance-decline ratio on the NSE was in favour of the gainers at 1409:344.

The broader indices outperformed the Sensex today; the BSE Mid-cap index jumped 3.40% and the BSE Small-cap index surged 2.78%.

BSE Realty (up 5.91%); BSE Capital Goods (up 4.02%); BSE Bankex (up 3.93%); BSE Power (up 3.57%) and BSE Metal (up 3.43%) were the top sectoral gainers while BSE IT (down 0.56%) and BSE Fast Moving Consumer Goods (down 0.13%) were the losers.

The key gainers on the Sensex were BHEL (up 6.74%); Hindalco Industries (up 4.97%); State Bank of India (up 4.92%); Tata Motors (up 4.85%) and DLF (up 4.78%). TCS (down 1.80%); Wipro (down 0.93%); ITC (down 0.80%); NTPC (down 0.36%) and Sun Pharma (down 0.34%) were the key losers.

The Nifty was led by Reliance Infrastructure (up 13.08%); Reliance Power (up 7.95%); Jaiprakash Associates (up 7.43%); Reliance Communications (up 7.40%) and IDFC (up 7.27%). Cairn India (down 2.71%); TCS (down 1.95%); ITC (down 0.87%); BPCL (down 0.86%) and Sun Pharma (down 0.79%) settled lower on the index.

Markets in Asia closed mostly higher on easing of oil prices for the second day and on reports that the China Banking Regulatory Commission has allowed banks to continue lending to local government financing vehicles for land reserves and road construction.

The Shanghai Composite rose 0.20%; the Hang Seng jumped 1.65%; the Jakarta Composite surged 1.10%; the Nikkei 225 climbed 0.92%; the Straits Times advanced 0.78%; the Seoul Composite gained 0.63% and the Taiwan Weighted added 0.28%. Bucking the trend, the KLSE Composite fell by 0.15%. At the time of writing, the key European indices were trading with marginal gains and the US stock futures were in the positive.

Back home, foreign institutional investors were net buyers of shares amounting to Rs329.09 crore on Monday whereas domestic institutional investors were net sellers of equities totalling Rs699.14 crore.

Tata Power said the first 800 MW unit of its flagship 4,000 MW Mundra UMPP has achieved full capacity utilisation and commercial date of operation would be announced soon. The 4,000 MW Mundra plant in Gujarat is the country’s first Ultra Mega Power Project (UMPP). The first 800 MW unit of Mundra project achieved full load on 25th February. The stock gained 2.19% to close at Rs111.95 on the NSE.

Orchid Chemicals & Pharmaceuticals today said it has redeemed outstanding overseas securities worth $167.64 million (over Rs820 crore) on the due date. The company has redeemed the outstanding Foreign Currency Convertible Bonds (FCCBs), including yield-to-maturity, aggregating $167.64 million on the due date, 28 February 2012, Orchid Chemicals said in a statement. The Chennai-based firm had issued the bonds in February 2007. The stock jumped 5.15% on the NSE and closed at Rs188.

Pennar Industries has developed new product lines and has received orders amounting to Rs16 crore. The company has received order for Air Pre-heater Tubes from clients including BGR Energy, GEI Industrial Systems, FIVESCAIL-KCP and Nu-way Heatransfer. The stock climbed 5.96% to settle at Rs32 on the NSE.