The Nifty may touch the level of 5,450 if it keeps itself above 5,285. However, the risk of a reversal is increasing

Optimism from Europe after the continent's policymakers approved a financial package for Spanish banks saw the market closing around 1.30% higher. On a higher volume of 63.73 crore shares on the National Stock Exchange (NSE) the Nifty today covered the losses incurred in the past two trading day's and managed to close at its highest since 3 April 2012. If the benchmark manages to keep itself above 5,285 we may see the index reaching the level of 5,450.

Bouncing back from yesterday decline of over 0.70%, the market today opened higher this morning despite not-so-supportive global cues. The US markets settled lower on cautiousness ahead of the earnings season and worries about the global economy while markets in Asia were weak in morning trade on subdued trade data from China. Back home, the Nifty opened 12 points up at 5,287 and the Sensex started off at 17,432, a gain of 40 points over Monday's close.

A minor bout of profit booking in initial trade saw the indices falling to the day's low. At the lows, the Nifty was marginally down to 5,285 and the Sensex fell to 17,425. The market moved sideways till around 10.45am, after which buying interest in select blue-chips lifted sentiments.

Reports of Eurozone finance ministers agreeing to offer $37 billion to Spain to help its funds-starved banks saw the key European indices trade higher. The development was also cheered by the domestic market, which continued its north-bound journey in the post-noon session.

The market went on to hit its intraday high at around 2.30pm wherein the Nifty rose to 5,349 and the Sensex 17,631.

The benchmarks closed marginally off the day's high on optimism from the European finance minister's deal for Spanish banks. The Nifty settled 70 points (1.33%) higher at 5,345 and the Sensex climbed 226 points (1.30%) to finish trade at 17,618.

Markets in Asia closed mixed as weak trade data from China signalled a slowing demand in the Asian nation. China's imports rose 6.3% in June from a year ago while exports surged 11.3% on the year, faster than analysts' expectations.

The Shanghai Composite declined 0.29%; the Hang Seng fell 0.11%; the Nikkei 225 dropped 0.44%; the KOSPI Composite was down 0.36% and the Taiwan Weighted dropped 0.80%. On the other hand, the Jakarta Composite advanced 0.62%; the KLSE Composite gained 0.25% and the Straits Times surged 1.21%.

At the time of writing, the key European indices-CAC of France was up 1.30%, the German DAX gained 1.26% and Britain's FTSE 100 was trading 0.84% higher. On a similar note, the US stock futures were in the positive, a sign of positive opening of the US markets.

Back home, foreign institutional investors were net buyers of shares totalling Rs252.98 crore on Monday whereas domestic institutional investors were net sellers of equities amounting to Rs287.65 crore.