Private Banks, ADAG, Auto up

The Nifty was trading in a tight range around 5250 level at 14:24 hours, though it trimmed some losses and recovered more than 70 points from day's low of 5,197, led by private banks, Anil Dhirubhai Ambani Group, auto, power and select healthcare companies' shares. Short covering could be the reason behind this recovery as traders might have felt that the markets were oversold.

However, the consistent selling in heavyweights like Reliance Industries, SBI, BHEL, Bharti Airtel, Infosys, TCS, HDFC, Wipro and HUL was putting pressure - down 2-3%. Metal companies' shares too were down barring SAIL with 6% gain.

We cannot ignore that a visitation of 4,900 levels looks very likely, says Rajesh Jain, independent market strategist. He said, however, "I hold the view that this is a good time to pick up that initial 20% of the stocks of your portfolio and perhaps, continue to accumulate them."

The 30-share BSE Sensex was trading at 17,500, down 92 points and the 50-share NSE Nifty fell just 12 points to 5,241. The broader indices too were showing recovery - the BSE Midcap Index was down just 0.3% and Smallcap down 1%.

ICICI Bank and Axis Bank from financial space gained 1-1.5%; IDFC rallied 3% and HDFC Bank was up 0.4%. DLF from realty space bounced back with 2% gain.

ADAG stocks like Reliance Communications, Reliance Power and Reliance Capital were up 1-3%. Reliance Infrastructure was the biggest gainer with 10% rise as the company will consider share buyback on February 14.

Tata Motors from auto pack gained more than 2% followed by Maruti, Hero Honda, Bajaj Auto and M&M with 0.5-1.3% rise. Heavyweights L&T and ITC rallied 1-2%.

New listing - Omkar Special was trading at Rs 56.60, down 42.24% as compared to issue price of Rs 98 a share.

Infrastructure was the most beaten down sector since Tuesday, which showed bounced back today. Lanco Infratech surged 22% and GMR Infra gained 12%.

Global stocks, dollar fall

Global stocks slipped and the dollar fell on Wednesday as investors worried about the run-up in equity markets this year and US Federal Reserve Chairman Ben Bernanke said US unemployment remained too high.

US crude prices retreated as official data showed increases in U.S. oil inventories, while prices for Brent crude in London topped $100 a barrel, supported by unrest in Egypt.

US government debt prices rose as bargain hunters emerged as anxiety over the U.S. central bank's inflation-fighting pace pushed benchmark yields to nine-and-a-half month highs.

Bernanke told the a US House panel that a 9% unemployment rate was too high and the rate of inflation too low for the Fed to budge from its super-loose policy stand, while acknowledging recent economic improvement.

The euro broke above a key USD 1.3700 level versus the dollar on Bernanke's testimony before the US House of Representatives Budget Committee that largely echoed a speech he delivered last week.

Wall Street edged lower as investors booked profits after stocks hit new two-and-a-half-year highs Tuesday, but strong earnings made it likely the market would continue an upward trend.

Global stocks, as measured by MSCI's all-country world index are up more than 4% so far this year and the S&P 500, a US benchmark, has gained more than 5% since the beginning of 2011.

"The primary trend (in the market) is that we are moving up on solid earnings, and a little bit of profit-taking on a small volume only means new bids are coming up," said Joseph Greco, managing director at Meridian Equity Partners in New York.

Shares of Dow components Coca Cola Co and Walt Disney Co jumped after both reported strong results, helping the index outperform the broad market.

The Dow Jones industrial average was down 21.42 points, or 0.18 percent, at 12,211.73. The Standard & Poor's 500 Index dipped 6.88 points, or 0.52%, at 1,317.69. The Nasdaq Composite Index fell 11.03 points, or 0.39%, at 2,786.02.

European shares were off, further retreating from 29-month highs hit earlier this week, weighed down by mining shares on concerns over demand after top consumer China raised interest rates to fight inflation.

"Our view is that gently, not aggressively, we are not mega bearish, take money off the table. We are looking to buy the market at a lower level," said Philip Lawlor, investment strategist at Smith & Williamson in London.

A rush of deals by stock exchange operators had little impact on the big indexes.

Germany's Deutsche Boerse is in advanced talks to buy NYSE Euronext, while the London Stock Exchange agreed to buy Canadian stock market operato.

The dollar was down against a basket of major currencies, with the US Dollar Index off 0.38% at 77.701.

Against the Japanese yen, the dollar was up 0.21% at 82.49.

US Treasury debt prices were higher. The benchmark 10-year note was up 6/32 in price to yield 3.71%.

Bund futures settled at 122.33, down 49 ticks on the day to briefly touch their lowest since mid-April.

US light sweet crude oil fell 24 cents to USD 86.70 a barrel. But North Sea Brent for March delivery climbed above USD 100 a barred, up 90 cents at USD 100.82.

The US Energy Information Administration said domestic crude stocks rose 1.9 million barrels in the week to Feb. 4, a smaller increase than the forecast of a 2.4-million-barrel build.

Nifty Above 5300

Equity showed smart recovery from day's low and turned extremely volatile in trade at 10:20 hours. The Nifty bounced back above the 5300 level, which means traders were providing buying support at the same level. They felt that it could be oversold at this level as it has been falling since previous week.

Haresh Shivdasani, managing director and head of equities at HSBC said the key concern for investors right now is near-term headwinds like inflation and interest rates. “We are perhaps somewhere in mid-cycle and typically these are times of caution,” he informed. He said the mood right now is cautiously optimistic.

Foreign institutional investors were net sellers of Rs 726 crore in equities yesterday, as per provisional data. They were net sellers of Rs 6,300 crore in January 2010. Shivdasani said, first half of 2011 will not be easy for inflows. “We will see flows returning in second half of 2011,” he stated.

Oil & gas, private financial, auto, healthcare and infrastucture companies' shares were supporting the markets for recovery. However, selling continued in BHEL, SBI, ITC, DLF, Hindalco, Sterlite, ACC, Wipro, Reliance Communications, Tata Power and Hero Honda, which were limiting the gains.

The 30-share BSE Sensex gained 62 points at 17,838 and the 50-share NSE Nifty rose 20 points to 5,332 on the back of short covering.

Four shares declined as against one share advanced on National Stock Exchange. The broader indices slipped 1-1.5%.

Heavyweight Reliance Industries and ONGC gained 1.7% each. India's second largest lender ICICI Bank jumped 2% and Kotak Mahindra Bank rallied 4%.

M&M shot up 3% ahead of numbers today. L&T, HDFC, HUL and HDFC Bank were up 0.5-1%.

In midcap space, S Kumars Nationwide, Shriram City, UCO Bank, Dish TV India and IRB Infra gained 2-4% while Prakash Industries tanked 20%. Jai Corp, Man Infra, Jyothy Labs and Allcargo Global fell 7-8%.

In smallcap space, Surana Inds, Symphony, Everonn Education, Kirloskar Inds and Zenith Infotech rallied 4-9% whereas MIC Electronics, Allied Digital, INOX Leisure, C & C Construction and Piramal Life lost 7-13%.

Nifty around 5400

The Nifty started the session on a positive note but the consolidation continued for second consecutive day after a sharp cut seen in previous week. The index was hovering around the 5400 level. Asian markets too were quiet in trade.

Among frontliners, GAIL, BPCL, Ranbaxy Labs, M&M, Dr Reddy's Labs, BHEL, Suzlon, Power Grid, NTPC, Reliance Capital, Reliance Infrastructure and HDFC were witnessing buying interest.

However, the selling in L&T, ONGC, Sun Pharma, ITC, Reliance Industries and HCL Technologies erased some early trade gains.

At 9:17 hours IST, the 50-share NSE Nifty gained 9 points at 5,405 and the 30-share BSE Sensex rose 25 points to 18,062.

About 400 shares advanced as against 300 shares declined. The broader indices were flat with a positive bias.

Midcap & Smallcap space:

Punj Lloyd tanked 5% and Lanco Infratech was down 2% post disappointing quarterly numbers.

Bajaj Hindusthan wsa up 2.4% as there was a slight dip in bottomline but revenues were good.

Jubilant Foodworks was up 1% and Polaris up 0.4%.

Sun TV gained 4% after a fall of 11% yesterday. SpiceJet was up 2%.

ITI rallied 3% as its chairman expects Rs 2500 crore order from BSNL, MTNL soon.

Zee Entertainment rose 3% as the company will consider share buyback on Friday.

IOC was up 2% on fall in crude prices to USD 87.5/barrel.

However, Chambal Fertilisers, Nagarjuna Fertiliser and RCF fell 1% each.

Allied Digital tanked another 6%.

India Infoline was down 2% and Voltas down 1%.

Global cues:

Asian markets were quiet in trade.

The Dow Jones and S&P 500 hit another 2-1/2 year high led by banking pack backed by positive cues from Europe on Monday.

The Dow Jones Industrial Average ended up 70 points at 12,162. The Nasdaq Composite was up 15 points at 2,784 and S&P 500 index went up 8 points at 1,319.

Commodities

March natural gas fell 4.5% at USD 4.11 per MMBtu, lowest levels since late December

March crude oil was down 1.7% at USD 87.48/barrel, lowest level in over a week

April gold prices were flat at USD 1348.20 per ounce

March silver was up 1.4% at USD 29.35 per ounce

Cotton gained 4.3%

F&O cues:

Total Nifty futures up Rs 514 crore, Options up Rs 2116 crore

Stock futures net add 2.6 cr shares in Open Int

Nifty Fut Open Int shed 1.5 lakh shares in Open Int; Nifty futures discount at 2 pts versus discount of 9 pts

Nifty Open Int PCR up at 1.15 versus 1.12

Nifty Put add 29.3 lakh shares, Call add 7 lakh shares in Open Int

Highest Open Int outstanding at 5400 Put, 5500 call, 5700 call

Nifty 5100 Put adds 14 lakh shares (45%) in Open Int; prem down from 29 to 23

Nifty 5300 Put add 9 lakh shares (18%) in Open Int, prem down from 71 to 66

Nifty 5700 Call add 3.9 lakh shares (6%) in Open Int, prem down from 15 to 12.5

Nifty 5400 Call add 3.7 lakh shares (7%) in Open Int, prem down from 100 to 93.5

Nifty 5000 Put add 3.16 lakh shares (13%) in Open Int

Nifty 5500 Put shed 5.7 lakh shares (12%) in Open Int

Nifty 5600 Call shed 2.9 lakh shares (5%) in Open Int

Target for February 07 - February 11, 2011

Company	Recommendation	CMP (Rs.)	Target Price (Rs.)	Stop Loss (Rs.)
MAHMAH Feb Futures	Short	669	600	720.3
HCLTEC Feb Futures	Short	482	442	503.6
RELCOM Feb Futures	Short	115.2	103	121.6

NOTE : This are just  technical views on market & stocks we are responsible for any kind of buy or sell. First analaysis the market then decide.