Bumping into resistance!

If your success is not on your own terms, if it looks good to the world but does not feel good in your heart, it is not success at all. - Anna Quindlen.

The rally may give a slight impression that things are looking up. The appetite for risk could extend for a day or two. However, doubts persist whether the upbeat start to January can be sustained given the foggy outlook for the Indian economy and problems plaguing other markets. The bounce in world markets may bump into resistance amid persistent worries about the eurozone debt crisis.



The start is likely to be flat to slightly positive; 4500-4800 will continue to be the broad trading range on the Nifty in the short term. Indices in Japan and China have resumed trading after a long new year break. Both are up modestly. Other Asian markets are mixed.

A lot of stock-centric action is expected based on news reports. FIIs and DIIs both pumped more than Rs 2bn (provisional) on Tuesday.

US stocks rallied after the ISM manufacturing PMI jumped to a six-month high. Manufacturing PMI data in several key geographies have also shown improvement.

European stocks closed higher as well. Meanwhile, oil prices have spiked on the US-Iran rhetoric. The dollar index is down while the euro has risen above the $1.30 level.

The FIIs were net buyers of Rs 2.55bn in the cash segment on Tuesday, as per the provisional figures released by the NSE. The domestic institutional investors (DIIs) were net buyers of Rs 2.06bn.

The FIIs were net buyers of Rs 11.65bn in the F&O segment on Tuesday, according to NSE data.

The foreign funds were net sellers of Rs 391mn in the cash segment on Monday, the SEBI data shows. Mutual funds were net sellers at Rs 551 in the cash segment on the same day.

Global Data Watch: Services PMI data from across the world (including China, Germany, EU and India), UK construction PMI, EU provisional CPI, US mortgage applications, US factory orders and US vehicle sales.

RIL will be in focus after the Government gave an in-principal approval to its new investment plan for the KG basin block. Steel companies with no captive mining may extend gains after the government hiked the export duty on iron ore. Media stocks may also rise further following the announcement of the big RIL-TV18 deal.

Gujarat Gas could be in the spotlight amid talk of Adanis, GSPC and Oil India showing interest in buying the BG Group's stake in the company. Mundra Port and Adani Enterprises could remain under pressure after the Union Home Ministry rejected two its plans on security grounds. However, Adani Power might gain on reports that it has been shortlisted for four overseas power projects.

Indian Hotels is another stock to keep an eye on amid reports that the New Delhi Municipal Council (NDMC) has asked IDFC to draw up a PPP structure for operating the Taj Mansingh property. Indian Hotels has sought an extension of 33 years. IT companies will remain in focus ahead of Infosys' results on January 12.

Telecom stocks like Bharti Airtel, Idea and RCOM may fall amid reports the DoT is likely to penalise these companies for allegedly understating revenues during FY07 and FY08.

PSUs with large Government stake and private companies with more than 75% promoter holding may advance after SEBI allowed them to dilute their stake via stock auctions. SBI might rise on a report that it is likely to benefit from a settlement with pharma major Wockhardt.