Resumption of down move likely

Volatility returned to be the market as benchmark indices declined after opening up. The Sensex fell 61.16 points, or 0.18 per cent, to settle at 33,856.78 while the Nifty rose 5.45 points, or 0.05 per cent, to close at 10,426.85. Stocks of public sector banks surged on optimism triggered by media report that Bank of India recovered nearly Rs 7,000 crore bad loans in the last two months. IT stocks declined as the rupee firmed against the dollar.

The BSE Mid-cap and Small-cap indices rose 1 per cent 1.14 per cent, outperforming the Sensex.

Among sectoral indices, the BSE Healthcare (1.04 per cent), Telecom (1.74 per cent) and Oil & Gas (1.63 per cent) went up and IT went down 1.56 per cent.

Technical view

Sameet Chavan, chief analyst-technical & derivatives, Angel Broking, said: “Profit booking took place precisely after Nifty entering the resistance zone of 10,460-10,500. At one point, market was rushing towards 10,500 and was about to negate the ‘Trend Line’ breakdown happened on March 05. Traders gave respect to this development and hence, we saw Nifty precisely closing at this ‘Trend Line’ resistance level of 10,430. One thing is quite clear; the short sellers will become active once we see index sustaining below Tuesday’s low of 10,377. In this scenario, we may see resumption of the down move to test 10,300–10,260 levels. On the flipside, in case of a continuation of this relief rally, traders should look to lighten up longs in the zone 10,480–10,520.

Market view

Anand James, chief market strategist, Geojit Financial Services, said: "Rising industrial production and softer inflation boosted sentiments, while the potential for settling PNB fraud dues also brought in cheers to the hitherto reluctant banks. Predictions of ‘below than normal monsoons’ may prompt investors to carefully weigh the ongoing rally’s sustenance."

—Ashwin Punnen