Market may add gains but volatility remains key factor

The Market may log gains due to return of hopes amongst the investors. The firm trend in US markets, gain in European markets and rise in Asian indices trend in the present trades could move up the local indices in early trades. However, caution should be exercised as strong volatility remains the major concern. Among the indices, the Nifty could test higher levels around the 5000-6000 range, while on the downside it has a key support around 4700. The Sensex has a likely support at 16320 and may face resistance at 17200.

Major US indices rose on Wednesday for the third session in a row, as strong January retail sales report helped investors set aside recent worries about the recession . While the Dow Jones flared up by 179 points at 12552, the Nasdaq moved up by 54 points to close at 2374.

Except Wipro all the Indian ADRs traded firm on the US bourses. HDFC Bank led the pack with gains of over 4% while, Dr Reddy's, Tata Motors, MTNL, Infosys and Satyam closed with the gains of 1-2% each.

The Nymex light crude oil for March delivery gained by 49 cents to close at $93.27 a barrel. In the commodity space, the Comex gold for April delivery slipped by 90 cents to settle at $910.20 an ounce.