"NIFTY CLOSED ABOVE 5900 : WILL IT CLEAR 5960"?

The BSE 30-share Sensex was up 182.89 points or 0.94% to 19,691.78. The Sensex rose 201.68 points at the day's high of 19,710.57 in late trade. The index lost 187.48 points at the day's low of 19,321.41 in morning trade.

The S&P CNX Nifty was up 50.30 points or 0.86% to 5,907.65.

The BSE Mid-Cap index rose 1.77% and the BSE Small-Cap index rose 2.05%. Both these indices outperformed the Sensex.

The key benchmark indices started the week on a buoyant note, extending Friday (10 December 2010)'s 1.3% gains, on firm global stocks. World markets rose after Beijing refrained from raising interest rates over the weekend. Index heavyweight Reliance Industries (RIL) edged higher in choppy trade. Capital goods, consumer durables, pharma, metal and realty stocks rose. Banking stocks reversed initial losses. The BSE 30-share Sensex was up 182.89 points or 0.94%, up close to 370 points from the day's low and off close to 20 points from the day's high. The market breadth was strong, as small and mid-cap stocks attracted buyers for the second day in a row after a recent sell-off.

Intraday volatility was high. The market regained positive zone after slipping into the red for a brief period after a firm start. Stocks extended gains in morning trade. The key benchmark indices reversed gains in mid-morning trade after a sudden slide. The market soon came off lows. The market moved in a narrow range in afternoon trade. The market regained positive zone in mid-afternoon trade as European stocks rose in early trade. The market extended gains in late trade.

The market shrugged off reports that the Securities & Exchange Board of India (Sebi) plans to make it mandatory for companies to provide more disclosures when they seek to place shares privately with institutional investors and also for block and bulk deals. As per reports, Sebi has started to work on changing the existing rules governing private placement ofshares and off-market transactions after growing evidence that promoters and market operators are routinely exploiting loopholes in the regulations and rigging stocks.

Foreign funds continued selling of Indian shares for a fourth day in a row on Friday, 10 December 2010, data released by the Securities & Exchange Board of India (Sebi) showed. Foreign institutional investors (FIIs) sold shares worth a net Rs 966.20 crore on Friday, 10 December 2010, compared with an outflow of Rs 1197.10 crore on Thursday, 9 December 2010. FIIs have pressed sales of shares worth a net Rs 1161.10 crore so far this month (till 10 December 2010).

NSE's volatility index, India VIX, was up 4.35% at 22.57. The index had lost 4.29% to 21.63 on Friday, 10 December 2010. The index had jumped 10.62% to 22.60 on Thursday, 9 December 2010. The index had jumped 6.19% to 20.43 on Wednesday, 8 December 2010. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days.

The next major trigger for the equity market is the advance tax payment of corporates for the third installment, which falls due on 15 December 2010. The advance tax figures will provide a cue on Q3 December 2010 corporate earnings.

But, high inflation remains the major cause of concern for the policymakers. The food price index rose 8.69%, while the fuel price index climbed 9.99% in the year to 27 November 2010, government data on Thursday showed. In the prior week, annual food and fuel inflation stood at 8.60% and 9.99% respectively. The primary articlesprice index was up 12.66% in the latest week compared with an annual rise of 12.72% a week earlier.

The government will announce inflation data for the month of November on Tuesday, 14 December 2010. The rate of inflation stood at 8.58% in October 2010, marginally lower than 8.62% in September 2010. The Reserve Bank of India (RBI) undertakes a mid-quarter policy review on Thursday, 16 December 2010. RBI governor D Subbarao recently expressed discomfort with the current levels of inflation. "Inflation is coming down but still above the Reserve Bank's tolerance level; growth on the other hand has been encouraging," Subbarao said.

The market breadth, indicating the overall health of the market, was strong. On BSE, 2058 shares rose while 886 shares fell. A total of 75 shares remained unchanged.

Among the 30-member Sensex pack, 25 rose while the rest fell.

BSE clocked turnover of Rs 3338 crore, lower than Rs 4333.95 crore on Friday, 10 December 2010.

Rupee weakened on Monday (13 December 2010) tracking the euro's losses versus the dollar while a choppy local stock market failed to provide any clear cues on the direction of foreign fund flows.

Rupee was at 45.16/17 per dollar, 0.2% weaker than its 45.05/06 close on Friday.