Sensex survives 2G scare...Nifty ends above 5250

It was another good session for the Indian market, notwithstanding an intraday interruption sparked by a disruptive Supreme Court verdict on the 2G scam. With this, the main indices have now gained for three successive sessions, more than reversing Monday's big crash. The apex court's ruling on the 2G case didn't have a material impact on the overall sentiment, although shares of few companies hit by that order did feel the heat.

The BSE Sensex ended at 17,432, up 131 points from the last close. It earlier touched a day's high of 17,504 and hit day's low of 17,308. The Nifty settled at 5,270, up 34 points. It hit a day’s high of 5,290 and day’s low of 5,226.

Despite the volatility the market breadth was in favor of the bulls. On the BSE, 1573 stocks advanced as against only 1295 declining stocks and 126 stocks remained unchanged.



The INDIA VIX on the NSE was up ~3.5% to close at 23.69. The index hit day's high of 24.26 and hit day’s low of 21.88.

Among the 30 constituents of the Sensex, Bharti Airtel, DLF, Sterlite, Wipro, Gail and Hindalco were among the major leaders. On the other hand, Cipla, ITC, Jindal Steel, Tata Motors and Sun Pharma ended in the negative terrain.

Among the BSE sectoral indices, the Teck index was the top gainer, up 2%. The IT index gained 1.5%, while the Metal index was up 1.4%. Capital Goods and Realty indexes rose 1.2% or more. On the other hand, BSE Pharma index lost 0.6% and BSE Consumer Durables index fell 0.4%.

The BSE Mid-Cap index rose ~0.6% while the BSE Small-Cap index gained 0.5%.

The markets turned volatile briefly after the Supreme Court scrapped 122 2G licences issued under the tenure of former Telecom Minister A. Raja. However, traders used the dip to buy the market.

The telecom shares of the companies affected by the apex court's verdict tumbled but Bharti Airtel gained on speculation it might benefit from the re-allocation of the 2G licences. Shares of RCOM, DB Realty, Unitech, Videocon Industries and TTML were among the top losers.

"The rising market brings back memories of 2007. Risk appetite is back on the table as global liquidity, unlocked by easy monetary policies, chases high returns after a tumultuous 2011. The trigger for Wednesday’s worldwide ‘risk on’ rally came from upbeat manufacturing data.

Such powerful is the sentiment that lingering problems are being overlooked. However, it won’t take long for fear to return on some adverse development - domestic or overseas. Some cooling is a given after a strong rally. So, ride the bullish wave as long as it lasts but don't commit too much lest you have to repent later," says Amar Ambani, Head of Research, IIFL.

Technically speaking, after a long rally the Nifty has witnessed a Doji candle stick pattern on the daily charts. A Doji implies indecision on the market's immediate direction. Is the rally sustainable? That is a big question. One cannot rule out some profit booking at current levels. The near term support for the Nifty is seen at 5197, which is the 200DMA.

Globally, Asian markets settled with healthy gains as investors welcomed the generally upbeat manufacturing PMI reports from China to US. But the European markets were rather subdued although mining shares were up after Xstrata confirmed merger talks with Glencore.

US stock futures were flat ahead of data on weekly jobless claims and testimony by Federal Reserve Chairman Ben Bernanke on the state of the economy.