Nifty may move in the range of 5,390-5480

The market witnessed its first weekly close in the red, snapping its seven-week gaining streak that started since the beginning of 2012. The reversal happened as investors booked profits on global economic concerns and a slowdown in the country’s economic growth. The Sensex and Nifty fell by 2% in the week after having rallied 18% and 20%, respectively, in the last seven weeks.

The Sensex declined 366 points at 17,924 and the Nifty lost 135 points to finish the week at 5,429. If the pattern of a lower low and lower high continues, as it did on Thursday and Friday, we may see the decline continuing with the Nifty finding support at 5,390. At the higher level, index may get resisted in the 5,460-5,480 area.

Resuming after an extended weekend, the market extended its gains on Tuesday following comments from Reserve Bank of India (RBI) deputy governor Subir Gokarn that the central bank may go in for another CRR cut on the back of tight liquidity. Late sell-off resulting from a weak opening of the key European markets saw the indices settling lower on Wednesday. The market settled lower on Thursday amid a highly volatile session on weak global cues. Offloading of blue-chips by institutional investors saw the benchmarks settling lower on Friday.

Among the sectoral gainers, BSE Fast Moving Consumer Goods and BSE IT, rose 1% each, while BSE Realty and BSE Bankex (down 7% and 5%, respectively) were top losers among indices.

TCS (up 3%), ITC (up 2%), ONGC, Sun Pharma and Coal India (up 1% each) were the top  gainers on the Sensex while the losers were led by Sterlite Industries, DLF (down 11% each), State Bank of India (down 9%), Larsen & Toubro (down 7%) and HDFC (down 6%).

The top performers on the Nifty were Bharat Petroleum Corp (up 6%), TCS (up 3%), Power Grid Corp, ITC (up 2% each) and Coal India (up 1%). The main laggards on the 50-stock index were Jaiprakash Associates (down 12%), Sterlite Ind, DLF (down 11% each), Punjab National Bank and Reliance Communications (down 10% each).

Inflation based on the all India Consumer Price Index (CPI) stood at 7.65% in January, as per the first nationwide retail inflation data released by the government Tuesday. Experts believe that the CPI will become a benchmark for the RBI’s monetary policy decisions, besides being used by the government but it will take some more time to replace the WPI bases inflation data. Inflation based on WPI was 6.55% in January this year.

Leading global financial services company Citi Inc has sold its entire stake in mortgage lender HDFC for $1.9 billion (around Rs9,327 crore). The bank said that it sold its entire holding of 145.3 million shares, or 9.85% stake, in HDFC through the National Stock Exchange (NSE) at Rs657.56 per share.

Earlier this week, reports indicated that SBI planned to lend around Rs1,200 crore to the troubled Kingfisher Airlines, including working capital of Rs400 crore, bank guarantee of Rs500 crore and loan repayment extension worth Rs250-Rs300 crore. While SBI denied any such move, the stock tumbled over 8% on Wednesday.

On the global front, pressure on Iran on account of its nuclear ambitions has led to a rise in oil prices. Besides, markets around the world will eye the Group of 20 (G-20) finance ministers’ meting which will discuss additional funding for the IMF.