Late recovery lifts Nifty above 5350

The end of Tuesday Phenomena had minimal impact over the sentiment on Dalal Street. After taking a breather in yesterday’s session, bulls yet again began the uptrend as the NSE Nifty after a volatile session managed to end with healthy gains.

The sentiment was upbeat as the main indices were comfortably perched after a sedate start. Gains in power, metals and technology counters ensured that the Nifty moved smartly higher from a day’s low of 5325 level.

The Sensex staged a smart recovery from a low of 17580 and moved to hit a high of 17,809 before ending the session at 17,707.



The market seemed to have overlooked the fact that Tuesday’s 6.9% advanced GDP estimates for FY12 marks a significant slowdown from 8.4% growth achieved in the previous year.

Globally, reports pointed to some progress in talks to save Greece from a default. Also, Fed chief Bernanke has reiterated his readiness for more stimulus if the need arises.

In Asia, the Nikkei index in Japan and the Hang Seng index in Hong Kong ended higher by 1.1% and 1.4% respectively. Stocks in Europe also were in the green with the FTSE index in UK was up 0.3%, DAX index Germany gained 0.6% and CAC index in France was trading higher by 0.3%.

Technically, formation on an inside bar after a big black candle on Tuesday is indicating a bullish bias and a higher opening above 5400 levels should re-ignite bullish momentum in the market.

The Nifty was unable to breach yesterday’s low of 5320 which also is the crucial breakout point for the index indicating strong support. A breach below the same would indicate some selling pressure may emerge.

"The upcoming Budget will be crucial in this context. But, before that the market will have to grapple with state elections. A favourable result for the UPA will be seen as a positive. On the flip side, the undertone might be hit in case of an adverse outcome for the Congress. A lot would also depend on the FII flow which has been staggering in the past month or so. However, after such a long rally one must remain on guard and stay stock specific." says Amar Ambani, Head of Research, IIFL.

The BSE Sensex ended at 17,707, up 85 points from the last close. It earlier touched a day's high of 17,809 and day's low of 17,579.

The Nifty settled at 5,368, up 33 points. It hit a day’s high of 5,397 and day’s low of 5,325.

The market breadth was in favor of the bulls. On the BSE, 1723 stocks advanced as against only 1157 declining stocks. While 108 stocks remained unchanged.

The INDIA VIX on the NSE was down ~2.6% to close at 24.27. The index hit day's high of 25.01 and hit day’s low of 24.17.

Among the 30 constituents of the Sensex, Hindalco, GAIL, DLF, Coal India, Hero Motocorp and Maruti were among the major leaders. On the other hand, Bharti Airtel, ICICI Bank, ONGC, Cipla and ITC ended in the negative terrain.

Among the BSE sectoral indices, the BSE Consumer Durables index was the top gainer, up 3%. The BSE Realty index gained 3%, while the BSE IT index was up 1.7%. Metal and Power indexes rose 1.2% or more. The BSE Mid-Cap index rose ~1.4% while the BSE Small-Cap index gained 0.7%.

Shares of Bharti Airtel fell over 6% to end at 354 after the telecom major announced lower than expected quarterly result. The company’s consolidated net profit stood at Rs10.11bn in the October-December quarter compared with Rs13.03bn in the same period last year. Consolidated revenue grew more than 17% to Rs184.77bn from Rs157.72bn in the corresponding quarter last year