Market Outlook ---- September 22, 2010

Dealer’s Diary
The key benchmark indices logged smart gains for the third straight session on foreign institutional investors' buying spree and robust 2Q advance tax payments from frontline companies. Nevertheless, volatility was intense as the Sensex and Nifty gyrated near their psychological levels of 20,000 and 6,000, respectively, along with achieving their highest levels in 32 months. Despite the rise, the market breadth was weak, as small and mid-cap stocks underwent correction. While, FMCG shares declined on profit booking, software pivotals gained on improving sentiment in the US economy. The Sensex and Nifty closed with gains of 0.5% each. However, BSE mid and small-cap indices were down by 1% each. Among the front liners, TCS, Wipro, Tata Power, Tata Motors and HDFC gained 2–5%, while ITC, JP Associates, DLF, Reliance Infrastructure and Jindal Steel lost 1–2%. Among mid caps, Kwality Dairy, CMC, IBN 18, Marico and JM Financials gained 4%, while Redington India, TVS Motor, Sigrun Holdings, IL&FS Transportation Network and Indraprastha Gas lost 4–6%.

Markets Today
The trend deciding level for the day is 19984/6001 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 20107–20212/6041–6072 levels. However, if NIFTY trades below 19984/6001 levels for the first half-an-hour of trade then it may correct up to 19879–19756/5970–5930 levels.

Economic and Political News
• India's GDP likely to grow by 9.2% in FY2011, says CMIE
• Kotak Mahindra ups interest rates on term deposits
• Rupee at 4-month peak; up 15 paise against dollar
Corporate News
• Bajaj to increase Discover production from next month
• Ranbaxy gets USFDA’s approval to sell Alzheimer's disease drug
• US firm, Prakash Steelage ink MoU for specialised forging unit