Caution ahead

Market is likely to witness cautious trend as the RBI has surprised the market by hiking the cash reserve ratio by 50 basis points to curb inflation coupled with the last two negative closes may weigh on the local indices in early trades and thereafter could exhibit volatility during intra-day trades. However, overnight gains in the US and strong Asian indices in the morning trades markets may add to the market advantage and help the sentiment turn positive. Among the domestic indices, the Nifty may slip to 4000, while on the upside it could edge higher to 4150. The Sensex has a likely support at 14000 and may face resistance at 14300.

US indices ended in the green on Tuesday on optimism about Alcoa merger talks. While the Dow Jones jumped by 102 points to close at 12655, the Nasdaq ended 10 points higher at 2460.

Indian ADRs except Wipro and MTNL all ended in the red on the US bourses. HDFC Bank fell sharply and tumbled by 6% and ICICI Bank slipped 5% while Satyam, VSNL, Tata Motors, Rediff, Patni Computers, Infosys and Dr Reddy's declined over 1-3% each.

Crude oil prices are moving up for the last few sessions. The Nymex light crude oil for March delivery rose $1.25 to close at $59.06. In the commodity space, the Comex gold for April series moved up $1.20 to settle at $668.50 a troy ounce.