Expect an oversold bounce which may take Nifty to 5,450

The market which saw listless trade in the absence of any triggers, ended flat with a positive bias on Tuesday, reflecting the small gains accrued by Asian markets today. The Sensex and Nifty opened at 18,016 and 5,385, respectively, and hit an intra-day high at 18,110 and 5,423 in the early afternoon. Oil & gas, auto, banking, realty and consumer durable stocks supported early gains. Also, Asian markets, which were weak in early trade, were higher in subsequent trade, supporting investor sentiments here. While the key indices were positive, the gains were marginal in the absence of any major trigger.

There was selling pressure from institutional investors after news about inflationary pressures that could impact economic growth. The market hit its intra-day low, lower than that of yesterday, at 17,934 and 5,367. But value buying came in immediately afterwards and the market closed positive. The Sensex closed at 18,012, up 19 points, and the Nifty closed at 5,395, a gain of 8 points. The advance-decline ratio on the National Stock Exchange was 642:744.

In the broader markets, the BSE Mid-cap index settled flat and the BSE Small-cap index declined 0.04%.

In the sectoral space, BSE Capital Goods (up 1.19%), BSE Consumer Durables (up 0.81%), BSE Bankex (up 0.57%), BSE Oil & Gas (up 0.20%) and BSE Healthcare (up 0.19%) were the top gainers. BSE Fast Moving Consumer Goods (down 0.94%), BSE Realty (down 0.58%) and BSE PSU (down 0.37%) were the major losers.

Larsen & Toubro (up 1.75%), Cipla (up 1.62%), Hero Honda (up 1.33%), ICICI Bank (up 1.27%) and Tata Steel (up 1.24%) were the top performers on the Sensex. Reliance Infrastructure (down 1.88%), DLF (down 1.84%), ITC (down 1.45%), State Bank of India (down 1.39%) and TCS (down 1.07%) settled at the bottom of the index.

The government is likely to miss the revenue collection targets during 2011-12, mainly on account of high inflation and moderating economic growth. "Inflation can affect domestic demand and thereby adversely affect GDP growth... and consequently our tax collection," revenue secretary Sunil Mitra said, during his address at the annual conference of chief commissioners and directors general of income tax.

Markets in Asia, with the exception of the Shanghai Composite closed higher, albeit with marginal gains, after the Goldman Sachs Group expressed optimism in commodities. Among Japanese stocks, Sony surged 2.7%, following an announcement that it expects to return to profits in fiscal 2011. The electronics major reported a net loss of 260 billion yen ($3.2 billion) for the last fiscal year.

The Shanghai Composite edged lower following Goldman Sachs lowering its economic growth forecasts for China to 9.4% this year, from 10% previously, citing recent weak economic data, high oil prices and supply constraints.

The Hang Seng rose 0.09%, the Jakarta Composite gained 0.20%, The KLSE Composite advanced 0.21%, the Nikkei 225 climbed 0.17%, the Straits Times added 0.08%, the Seoul Composite rose 0.29% and the Taiwan Weighted closed 0.10% higher.

Back home, foreign institutional investors were net sellers of stocks worth Rs293.56 crore on Monday. On the other hand, domestic institutional investors were net buyers of shares worth Rs194.22 crore.