Daily Call - Feb 4 2010

Dow ended two day winning streak as Obama’s pledge to complete banking and healthcare reforms revived fears of increased regulation and Pfizer’s disappointing outlook weighed on the health sector. A lesser than expected growth in US service sector also added to the negative sentiment. Metal prices fell back as the dollar strengthened. European markets too broke 3 day rising streak to close with about half a percent cuts as caution came back ahead of Thursday's Bank of England monetary policy decision and Friday's U.S. jobs report.

Positive global cues and short covering propelled our market higher in yesterday’s trade. While FIIs bought Nifty futures worth 2447 cr, Nifty OI went down by 7%, indicating short covering. A provisional buying of Rs. 396 cr in cash segment by FIIs was more heartening. Kirit Parikh panel, in its report submitted to Oil Ministry yesterday, has made some bold recommendations, the prominent ones being- Complete deregulation of petrol and diesel price, Rs. 100/cylinder hike in LPG and Rs. 6/litre hike in kerosene. While it is unlikely that these recommendations will be accepted in toto, Oil PSUs are likely to get a sentiment booster. Expect the market to recover after lower opening. Day traders can initiate long positions with first 10 minutes low as SL. At the risk of repeating, 4967 remains the resistance on the upside. 4814 is the immediate support followed by important one at 4750.