The fall will resume if Nifty closes below 5,450. Above that, the resistance is at 5,580

Yesterday we had suggested that if Nifty closes above 5,450, there could be a rally. The Nifty traded above 5,450 throughout the say and closed above it. If Nifty stays above 5,450, there is a chance the rally may extend to 5,510 and further to 5,580. If the market goes down, the first support is at 5,300. However, the bias is negative.

The Sensex and Nifty opened at 18,200 and 5,451, respectively. A fall in food inflation for the week ended 7th May and a decline in global crude prices supported the gains. Capital goods, auto and banking sectors were in demand in early trade.

The market hit the intra-day low at the start of the day itself, after which it was inching higher except for a small dip following reports that the government has hiked the contribution of upstream oil companies toward fuel subsidies to 38.8% for FY10-11. The intra-day low was at 18,161 and 5,433.

The fall was soon arrested and the indices once again started on their upmove boosted by the key European bourses opening higher. The post-noon session saw the market meeting its intra-day high, which happened to be a three-day high, at 18,429 and 5,518. The market settled with decent gain for the second day in a row. The Sensex rose 185 points to close at 18,326 while Nifty rose 58 points to close at 5,486. The advance-decline ratio on the National Stock Exchange was a positive 799:593.

Among the broader indices, the BSE Mid-cap index closed 0.61% higher and the BSE Small-cap index gained 0.49%.

BSE Capital Goods (up 2.31%, BSE Auto (up 1.37%), BSE Healthcare (up 1.34%), BSE Power (up 1.32%) and BSE Realty (up 1.31%) were the major sectoral gainers. On the other hand, BSE Fast Moving Consumer Goods (down 0.85%) and BSE PSU (down 0.01%) were the losers in the sectoral space.

Larsen & Toubro (up 3.57%) continued to hog the limelight, emerging as the top Sensex stock for the second day. Other main gainers were Cipla (up 3.22%), Bajaj Auto (up 3.05%), Tata Steel (up 2.76%) and Reliance Infrastructure (up 2.73%). The losers were led by ITC (down 1.82%), ONGC (down 1.17%) and State Bank of India (down 0.24%).

In a move that may spook Oil and Natural Gas Corporation's (ONGC) planned public offering, the government has hiked the contribution of upstream oil companies toward fuel subsidies to 38.8% for 2010-11 fiscal.

Of the Rs78,159 crore revenue that retailers lost on selling diesel, domestic LPG and kerosene below cost in the 2010-11 fiscal, upstream firms ONGC, Oil India and GAIL India have been ordered to contribute Rs30,296.7 crore, or 38.8%, sources in the know of the development said. ONGC has been ordered to chip in Rs24,892.43 crore, while OIL will provide Rs3,293 crore and GAIL Rs2,111.24 crore.

Markets in Asia settled mixed on the last trading day of the week as Japanese investors were worried about the recovery of the disaster-stricken economy. Stocks in Seoul gained after a steep fall in the previous session. On the other hand, uncertainty over China's economic outlook remained an overhang for the market.

Meanwhile, Tokyo Electric, commonly known as Tepco, posted a net loss of 1.25 trillion yen for the year ended in March, compared with a profit of 133.8 billion yen a year earlier. The loss, the biggest in Tepco's 60-year history, reflects costs to scrap damaged nuclear reactors at Fukushima Daiichi and a write-off of deferred tax assets with compensation payouts likely to depress profits for many years.

The Shanghai Composite shed 0.04%, the KLSE Composite lost 0.19%, the Nikkei 225 declined 0.14%, the Straits Times fell by 0.13% and the Taiwan Weighted was down 0.63%. On the other hand, the Hang Seng gained 0.16%, the Jakarta Composite rose 0.34% and the Seoul Composite advanced 0.76%.

Back home, foreign institutional investors were net sellers of stocks worth Rs34.41 crore on Thursday. On the other hand, domestic institutional investors were net buyers of equities worth Rs132.34 crore.