Market may extend its rebound

Asian markets have rallied for the second consecutive day as U.S. subprime concern are receding. The market is likely to display positive outlook on the back of firm overseas markets. However, FIIs remaining net sellers in equities and persisting intra-day volatility may see the market witness sideways movement. Among the key indices, the Nifty can see a pull-back to 4200 or 4250 levels and has a key support at 4070 levels in the near-term. The Sensex has a likely support at 14,100 and may face resistance at 14,500.

The US indices staged a comeback on Monday, recovering from its earlier selloff sparked by renewed worries about the credit and mortgage markets. With the Dow Jones adding 0.3% or 42 points at 13121 and the Nasdaq also ended firm with gains of four points at 2509.

However, most of the Indian ADRs closed in the red on US bourses. Patni Computer was the major gainer amongst the ADRs and gained over 3%, while Dr Reddy's lab closed with the marginal gains. Infosys, Satyam, Wipro, Tata Motors, ICICI Bank, VSNL, MTNL and HDFC Bank were down over 1-2% each.

Crude oil prices slipped marginally on Monday. While the Nymex light crude oil for September series fell by 86 cents at $71.12 a barrel. In the commodity segment, the Comex gold for December series slipped by 30 cents to settle at $666.50 an ounce.