Some relief!

"The greatest weapon against stress is our ability to choose one thought over another." -William James.

The otherwise stressed market seems to be witnessing a relief of sorts. Investors thoughts shifted to some fall in crude oil and some hike in fuel prices for now, which led to a rally of sorts on Monday. Most of the three-day advance has been driven by short covering after the NSE Nifty breached 5400. But, the index is still trading below various crucial technical levels. Ride the current upswing cautiously keeping in mind that most of the headwinds have yet to be conquered.



We see the markets opening higher, spurred by positive cues from the US market. European indices closed mixed amid anxiety ahead of the Greek parliament vote on new budget cuts. The euro has regained some of the lost ground versus the dollar. However, talk of the euro common currency and the union breaking up is back. Meanwhile, Asian markets (except China) are up today.

For our markets, the good news is that FIIs appear to be back in business going by the flows in the past 3-4 days. One has to see whether this trend prevails or tapers off. Expect some volatility before the F&O expiry on Thursday.

Softening crude oil prices have acted as a catalyst for the Indian markets lately. The trend certainly seems to be a positive one. The broader market too has shown some signs of life though it remains to be seen if it can sustain the momentum.

There is decent cushion for our market above 5450 levels on the Nifty. On the way up, there could be resistance around 5600 and 5650 levels.

FIIs were net buyers of Rs 14.47bn in the cash segment on Monday, according to the provisional NSE data. The domestic institutional institutions (DIIs) were net sellers at Rs 7.66bn on the same day. In the F&O segment, the foreign funds were net buyers at Rs 36.7mn.

The foreign funds were net buyers of Rs 10.21bn in the cash segment on Friday, as per SEBI web site. Mutual Funds were net buyers of Rs 578mn on the same day.

Tata Motors could be in action as the company has hinted that it may move the Supreme Court in the Singur land dispute.

Cairn India and Sesa Goa will be in the spotlight after Vedanta and Cairn Energy agreed to alter the deal terms. The latter has decided to drop the Rs 50 per share non-compete fee.

ONGC should extend its gains on media reports that Cairn and Vedanta have agreed that a part of the royalty paid by the state-run explorer could be deducted from revenues. The tax is currently paid entirely by ONGC.