Caution should be maintained

After posting significant gains of over 870 points in the last four sessions, buying interest may continue on the back of a firm trend. However, caution should be exercised as the market may move in tandem with global indices which are currently prone to higher inflation risk. Investors should also take into account the intra-day volatility. The key Asian indices are trading in the mix currently and are expected to fall further. Among the key local indices, the Nifty could test higher levels at 3900 and 3980 while it has a support at 3820 and a break below this level could see the index test 3740. The Sensex has a likely support at 13000 and may face resistance at 13400.

U.S. indices were little changed on Thursday, as traders questioned whether the Fed would act soon to cut interest rate, with the Dow Jones moved up by 14 points at 12461, while Nasdaq ended on a weak note with a loss of four points at 2452.

The Indian ADRs had a mixed outing on the US bourses. VSNL was the major gainer amongst the ADRs and vaulted over 7%, while Patni computers gained over 4% and ICICI Bank, Satyam, Wipro, Tata Motors, Patni computers and HDFC Bank were up around 1% each. Among the laggards Infosys lost over 1% while Dr Reddy's lab and MTNL closed with the marginal losses.

Crude oil prices moved up, while the Nymex light crude oil for May series went up by $2.08 at $61.69 a barrel. In the commodity segment, the Comex gold shot up by $4.20 to settle at $664.20 an ounce.