CONSOLIDATION

Indian benchmarks consolidated their position after showcasing the remarkable feat of registering biggest intra-day gains in last two years on Tuesday, though managed to extend the uptrend for the fourth consecutive session. Markets around the world celebrated the reports of peace bugle in Libya as autocratic leader Muammar Gaddafi accepted the peace plan proposed by Venezuelan President Hugo Chavez to end the civil unrest in Libya, post which crude-oil prices lost some steam and drifted lower. However later in the day, some reports also emerged that fresh air strike has hit Brega oil terminal in East Libya which slightly raised the concern in the domestic bourses. Local bourses took support from positive weekly inflation data which calmed down to 10.39% for week-ended Feb 19 along with the robust services PMI numbers which expanded to a 7 month high. The NSE's 50-share broadly followed index, Nifty closed with moderate gains of around a quarter percent below the crucial 5,550 support level while the Bombay Stock Exchange's Sensitive Index, or Sensex went home with fifty point gain to finish around the psychological 18,500 mark. The broader markets largely mirrored their larger peers as the BSE's midcap index went home with 0.33% gains while the smallcap index could only manage 0.21%. On the BSE sectoral front, Capital Goods counter remained the top gainer as it rallied 2.35% as shares of heavyweights like L&T and BHEL zoomed over 3% each. While the rate sensitive Auto pocket which rocketed 5.50% in yesterday's trade continued the uptrend and surged 1.86% in today's trade as majors like Tata Motors and Maruti Suzuki soared 3.08%, and 2.73% respectively. On the other hand metals pack languished at the bottom of the table with 0.79% losses, dragged down by Welspun Corp and Tata Steel as the respective stocks slipped 5.93% and 1.72%. Bajaj Finserv skyrocketed 20% and got locked in the upper circuit on the back of a tie up of Bajaj Allianz with Warren Buffet's Berkshire Hathaway to sell auto insurance in India.

On the global front, majority of the Asian equity indices rallied as investors resorted to hefty buying in undervalued stocks. South Korean benchmarks, Seoul Composite remained the top gainer in the space as it went home after surging over two percentage point. The European markets too displayed conviction as they traded on a sturdy note with gains of around a percent point. On the other hand, the screen trading for US index futures indicated that the Dow could open on a strong note.

Earlier on the Dalal Street, the benchmark after Wednesday's holiday, got off to a gap down start as investors took some profits off the table after the index registered a gargantuan three and a half percent surge on Tuesday.  However the frontline indices caught up with the regional peers in mid-noon session on easing food inflation and the buzz that the Libyan crisis may be heading towards a settlement. It largely remained a choppy session of trade as investors opted to book profits at higher levels which eventually led the bourses to settle with moderate gains of a quarter percent. The markets registered volumes of over Rs 1.67 lakh crore while the turnover for NSE F&O segment stood at over Rs 1.48 lakh crore. The market breadth on the BSE was optimistic as there were 1425 shares on the gaining side against 1417 shares on the losing side while 107 shares remained unchanged.

On Charts : The S&P CNX Nifty may  face resistance around 5,595 and 5620 marks  while  support for the Nifty will be around 5460 and 5420 mark. However, on the lower side the index may face major support around 5,380 levels  but it should not break and holds below this levels.

Finally, the BSE Sensex rose 43.26 points or 0.23% to settle at 18,489.76 while the S&P CNX Nifty advanced 13.90 points or 0.25% to end at 5536.20.

The BSE Sensex touched a high and a low of 18,603.57 and 18,253.62, respectively. The BSE Mid-cap and Small-cap indices gained 0.33% and 0.21%, respectively.

Jaiprakash Associates up 3.31%, BHEL up 3.30%, Reliance communication up 3.27%, L&T up3.17% and Tata Power up 3.09% were the major gainers on the Sensex.

On the flip side, Reliance Infrastructure down 3.30%, Bharti Airtel down 2.12%, Infosys down 2.02%, Tata Steel down 1.72% and Sterlite Industries down 1.70% were the main losers on the index.

India's headline services index expanded further for the month of February underscoring robust private sector output. Even as the input price pressures intensified, steady expansion of new business, increasing backlogs of work and sustained employment growth helped the index to move upwards.

The seasonally adjusted HSBC Purchasing Managers' Index (PMI) for the service sector activity, based on a survey of around 400 companies, rose to 60.2 in February from 58.1 in January. The composite index, which accounts for both the services and manufacturing sector, also increased to 61.0 in the last month from 59.6 in January, staying above the 50 mark that separates growth from contraction for the 22nd consecutive month. Earlier, the manufacturing PMI for February too had shown a slight improvement.

Meanwhile, the respondents of the survey mainly attributed the rapid expansion in new work intakes, to ongoing improvements in overall economic conditions. Earlier, the manufacturing PMI too had indicated a substantial rise in new order volumes. Further, in tandem with the strong growth momentum, input prices increased in February, driven primarily by higher costs for staff, food and fuel. Still, the rise in input costs slowed marginally from January's 30-month high. Further, the respondents are more optimistic about the outlook for activity over the next 12 months.

As such, growth in the input prices is likely to remain strong in the near term, prompted by world crude oil prices that are near record highs and inflation that continues to be in the double digit despite the Reserve Bank of India's (RBI) measures to tame it. Commenting on the India Services PMI survey, Leif Eskesen, Chief Economist for India at HSBC said, "Upside pressure on input costs underscored the prevalence of strong underlying inflation pressures and the need for further RBI monetary policy tightening."

The main losers in the BSE sectoral space were Metal down 0.79%, Oil & Gas down 0.67%, TECk down 0.66%, Information Technology (IT) down 0.66% and PSU down 0.42%.

On the other hand, Capital Goods (CG) up 2.35%, Auto up 1.86%, Consumer Durables (CD) up 0.45%, Realty up 0.38% and Power up 0.28% were the gainers in the BSE sectoral space.

Food inflation in the country drifted lower over the week-ended Feb 19 after the marginal rise seen in previous week. According to the data released by the ministry of commerce and industry on Thursday, food price index rose 10.39% on annual basis during week-ended Feb 19, better than the 11.49% recorded in the previous week. The wilt in prices of onions, potatoes and pulses has led to the ease in inflation numbers.

The inflation for primary articles for the week ended February 19, 2011 came at 14.85% as compared to 15.77% seen in the previous week. Fuel group inflation for the period stood at 12.56% against 12.14% seen in previous week. The wholesale price index, the most widely watched gauge of prices in India, advanced 8.23% in January from a year earlier, compared with 8.43% in December.

The S&P CNX Nifty touched a high and a low of 5570.75 and 5468.25, respectively.

The top gainers on the Nifty were Jaiprakash Associates up 3.92%, Tata Power up 3.72%, Tata Motors up 3.52%, L&T up 3.34% and BHEL up 3.20%.

The top losers on the index were Sun Pharma down 3.47%, IDFC down 3.45%, Reliance Infra down 3.38%, Suzlon down 2.72% and Sterlite Industries down 2.19%.

European markets were trading in the green on Thursday. France's CAC 40 gained 0.96%, Germany's DAX rose 0.78% and Britain's FTSE 100 surged by 0.96%.

All the Asian equity indices barring Shanghai Composite finished in the positive terrain on Thursday, shrugging off worries about surging oil prices on account of turmoil in the Middle East, supported by better than expected jobs report from the US. Crude oil retreated from a 29-month high also supported the sentiments in the region. Taiwan stocks snapped the session gaining more than one percent, with cement and food shares leading the main share index.