Nifty is on course to reach the level of 4850-4,900

The market snapped its two-day winning streak on mixed global cues, which resulted in a high degree of volatility. A setback in the PSU disinvestment process also weighed on the investors. The Nifty made a higher high today on rising volume of 56.45 crore shares on the National Stock Exchange (NSE). Yesterday, we had mentioned that Nifty is headed for a short rally where it may reach the level of 4,900. We continue to maintain it. Today's intraday low on the Nifty was the highest in the past 15 days (including today).

The market opened almost unchanged as investors resorted to profit booking after the two-day rally. The fall was despite gains in the US markets overnight and the Asian pack in morning trade today. Cautiousness among investors ahead of a crucial Cabinet meeting to approve the proposal allowing state-owned companies to buy back stake in public holdings kept sentiments lower. The Nifty opened 10 points up at 4,775 and the Sensex resumed trade at 15,967, a gain of 28 points over its previous close. Realty, metal and banking sectors witnessed selling pressure in early trade.

Volatile trade at saw the indices fluctuate in and out of the red in the first two hours. However, with the Cabinet deferring its decision on the on PSU disinvestments, the market entered the negative terrain in late morning trade.

The market began a gradual upmove in the noon session and entered the green around 2pm on select buying. The move enabled the indices touch their intraday highs. At the highs, the Nifty rose to 4,783 and the Sensex breached the psychological level of 16,000 to touch 16,005. But the gains were short-lived as a sharp sell-off pushed the market to the day's low with the Nifty falling to 4,729 and the Sensex going back to 15,822.

The market pared its losses but closed in the red, ending its two-day winning streak. The Nifty settled at 4,750, down 16 points, and the Sensex lost 57 points to finish at 15,883.

The advance-decline ratio on the NSE was 945:778.

While the Sensex closed with a cut of over 0.36% today, the broader indices settled with minor gains. The BSE Mid-cap index rose 0.17% and the BSE Small-cap index added 0.10%.

The top sectoral gainers were BSE PSU (up 1.73%); BSE Capital Goods (up 1.10%); BSE Bankex (up 0.69%); BSE Metal (up 0.63%) and BSE Power (up 0.56%). The declining sectors were led by BSE Auto (down 1.21%); BSE TECk (down 0.88%); BSE Consumer Durables (down 0.67%); BSE Fast Moving Consumer Goods (down 0.52%) and BSE IT (down 0.49%).
The Sensex leaders were Tata Motors (up 3.38%); BHEL (up 2.44%); Hindalco Industries; ICICI Bank (up 2.43% each) and ONGC (up 1.06%). The main losers on the index were Bajaj Auto (down 4.70%); Mahindra & Mahindra (down 4.25%); Hindustan Unilever (down 3%); Bharti Airtel (down 2.95%) and Hero MotoCorp (down 2.75%).

The top Nifty gainers were HCL Technologies (up 3.91%); Tata Motors (up 3.12%); Reliance Infrastructure (up 2.60%); Ranbaxy (up 2.56%) and ICICI Bank (up 2.20%). Bajaj Auto (down 4.52%); M&M (down 4.12%); ACC (down 3.47%); Bharti Airtel (down 3.39%) and Ambuja Cement (down 3.23%) settled at the bottom of the index.

Most markets in Asia settled higher as positive economic data from the US and Germany raised hopes of global growth in 2012. However, markets in China and Hong Kong settled lower on worries of continuing high inflation and lower export demand.

The Jakarta Composite surged 1.28%; the Nikkei 225 climbed 1.24%; the Straits Times gained 0.84% and the Taiwan Weighted rose 0.42%. On the other hand, the Shanghai Composite declined 1.37%; the Hang Seng fell by 0.80%; the KLSE Composite slipped by 0.62% and the Seoul Composite lost 0.49%. At the time of writing, the key European markets were trading lower while US stock futures were mixed.

Back home, institutional investors-both foreign as well as domestic-were net buyers in the equities segment on Tuesday. While foreign institutional investors pumped in Rs255.39 crore, domestic institutional investors invested Rs206.51 crore in shares.

Tulip Telecom chairman and managing director HS Bedi has pledged an additional 39 lakh shares to various entities. Mr Bedi has pledged 13 lakh equity shares each with ECL Finance and Cholamandalam Investment and Finance Company (CIFCL), according to regulatory filings made by Tulip on the BSE. Besides, he has pledged five lakh shares with Religare Finvest, four lakh each with STCI Finance and IFCI, respectively, the company said. Tulip Telecom gained 2.43% to close at Rs113.80 on the NSE.

The Maharashtra government on Tuesday announced new norms amendments to the development control rules (DCR). The state government overhauled the development control regulations to redefine the floor space index (FSI). Reacting to the development, Pujit Aggarwal, managing director of Orbit Corporation said that despite the push in the cost, the move will help realtors to launch new projects sooner. The stock surged 4.97% to settle at Rs31.70 on the NSE.

EPC major KEC International has won new orders worth Rs1,253 crore. The company has secured orders worth Rs723 crore in the transmission business, Rs253 crore orders in power systems for substation works, Rs123 crore orders in the water business, Rs105 crore orders in the cable business and Rs49 crore is in the telecom business. The stock jumped 8.22% to finish at Rs39.50 on the NSE.