Markets rangebound. Sensex slips 7 points

Indices	Open	High	Low	Close	Change
BSE - 30	5827	5860	5774	5815	07.29
BSE - 200	764	768	757	762	00.31
NSE - 50	1856	1865	1833	1848	02.45
Dow Jones	10480 91	Nasdaq	2050 10	FTSE	4468 4
Advances	1150	Declines	1385	Put / Call trades - 6849 : 16242
FII Investments	Rs 1623 Crs Apr 1 - 6		Domestic Funds	Rs 127 Crs Apr 1 - 6

The value of shares advancing was Rs. 2614 crores and the value of shares declining was Rs. 3262 crores. This indicates a marginal selling bias. The total traded volume on the BSE was Rs. 2082 Crores. The total traded volume on the NSE was Rs. 4689 Crores.

The markets opened on an optimistic note but closed almost flat as the sentiments were confused. The players clearly seeked a sense of direction and the retail segment abstained from the markets. The traded volumes took a fresh hit as the larger segment of traders preferred to wait and watch. The market breadth was marginally negative and the undertone was cautious. The Sensex was boosted by ACC, Bharati Tele, Guj Amb Cem, HDFC, Hero Honda (HROH.BO, news) , Hindalco (HALC.BO, news) , Infosys, ITC (ITCd.BO, news) , L&T, MTNL (MTNL.BO, news) , Ranbaxy, Satyam Computers, Tata Power (TTPW.BO, news) , Wipro (WIPRd.BO, news) and Zee Telefilms. The Sensex was dragged down by Bajaj Auto (BJAT.BO, news) , BHEL (BHEL.BO, news) , Cipla (CIPL.BO, news) , Dr Reddy, Grasim, HDFC Bank (HDBK.BO, news) , Hind Lever (HLLd.BO, news) , HPCL, ICICI Bank (ICBK.BO, news) , ONGC, Reliance (RELI.BO, news) Energy, Reliance, SBI, Telco and Tisco. The rupee ended the day at 43.54 levels (

00.20 ) against the US $.

The markets are likely to continue seeking a direction as the undertone is cautious. The traded volumes are shrinking and the players are preferring to wait and watch. The F&O segment shows a marginal improvement ( refer to the derivatives newsletter ) but the volumes there have been poor too. The FII inflows continue to cushion the markets and the domestic institutional players are now net sellers in the equity segment. The technology sector is likely to hold the key to the short term sentiments and needs to be watched carefully for short term trend determination. The upcoming earnings season is the most influential trigger for the markets in the near term. The technical indicators are pointing towards a consolidation phase and today being the last session of the week, we expect the institutional players to try and prop the markets higher to achieve a positive weekly closing.

The overseas markets have been negative and that will effectively cap the upsides as the sentiments will turn even more cautious. Overall, we expect a lack lustre day with the bulls trying to gain back the initiative.

The daily bar chart of the Nifty shows a fatigue at higher levels as the 1880 levels are acting like a major impediment to the markets. The floor is at the 1832 - 1830 levels. Should the markets fall below this support level, we expect a steeper fall and therefore a cautious approach is advocated. The index is also at a crucial levels in terms of being at the upper end of the bearish channel. Any closing below the 1830 will set the tone as negative and cause further weakness. The short term oscillators are showing a possible continuation of the correction and a clear buy mandate is only above the 1885 levels that too with high volumes. Till then, we suggest a wait and watch approach.