Sensex snaps 3-day losing streak...Nifty tops 5400

After three successive days of selling and underperformance, the Indian markets staged a smart comeback on Tuesday amid strong cues from the international equity markets. Wall Street enjoyed a really good trading session last night amid growing optimism about the state of the US economy. European stocks also extended gains overnight and today. Earlier, the Asian markets ended with smart gains. The Nikkei in Tokyo rose by 4.4% after Monday's break.



Today’s strong upswing was led by Realty, Auto, Pharma and PSU stocks. The Mid-Cap and Small-Cap stocks were also in demand.

However, the NSE Nifty continues to trade in a tight range of 5400 to 5500 levels for past one week. Technically, a break above 5,450 could see some short covering kicking in. The index could head towards the 200-DMA around 5650 if that happens. On the way down, near-term support is likely in the 5280-5320 zone.

"Be very selective in your stock picking and focus on the larger stocks. Keep your expectations a bit tempered lest you be disappointed. The short term prospects are neither rosy, nor are they dire. A rangebound yet choppy pattern may prevail for a while before any material breakout," says Amar Ambani, Head of Research (India Private Clients) - IIFL.

The BSE Sensex ended at 17,988 gaining 149 points. It had earlier touched a day's high of 18,041 and a day's low of 17,878. It opened at 17,929. While, the NSE Nifty rose 49 points to close at 5,414.

The gainers for the day on the BSE and NSE were Maruti, Bharti Airtel, DLF, Ambuja Cement, J P Associates, M&M, HDFC, Sterlite Inds, Sesa Goa, Cipla, Dr Reddy, BHEL, Tata Motors and Axis Bank.

While, Suzlon, ICICI Bank, HDFC Bank, Power Grid and TCS were the losers on the BSE and NSE.

In global action, markets across Asia closed higher for a third successive session, with the Japanese shares surging by over 4% after Monday's holiday. European benchmarks extended their gains in early morning trades but later turned flat. US stock futures also retreated to trade flat.

The BSE 500 non-index gainers were Gulf Oil Corp-S, NIIT, Anant Raj Inds-S, Glodyne Tech, Mahindra & Mahindra Fin, Amtek Auto-S, Whirlpool, Lancro Infra, KS Oils-S and Ballarpur Inds.

While, the losers of the BSE 500 non-index remained Shree Global Trd, Balkrishna Inds-S, kGN Inds, Suntech Realty, Amtech India-S, Puravankara Proj and MVL on the BSE.

The market breadth was positive 1,555 as shares are rising and 1,294 shares are declining on the BSE.