The Indian market has rallied strongly over four days. It may pause now

The local market opened in the red as concerns about high crude prices led investors to book profits early in the day, halting the three-day gains. It remained in negative territory for most part of the morning. However, news of a possibility of a solution to the crisis in Libya lifted the indices above the neutral line and up to the day's high.

The market was range-bound till around 2pm, after which selling pressure pushed the benchmarks lower. Volatile trade continued in the late session leading to a close with marginal gains.

The Nifty, which had hit an almost eight-month closing low of 5,226 on 10 February 2011 (starting 16 June 2010), has almost retraced the latest fall from 5,600 on 18th February. In the current rally the indices have made higher highs and lower lows each day which is one indication of its strength.

Today's trading session was an extremely volatile one. The Sensex and Nifty opened gap down at 18,318 and 5,478, respectively. During the initial hours of trading, the market fell to its intra-day low of 18,254 and 5,468. However, in the morning session itself, both the indices hit intra-day highs of 18,604 and 5,571, reacting to the news that the Libyan situation is likely to reach a peaceful solution. A sharp sell-off, however, followed immediately and the market went into the red in the afternoon. Eventually, the Sensex closed 43 points up at 18,490, while the Nifty rose 14 points to 5,536. The advance-decline ratio on the National Stock Exchange was 809:898.

The market breadth on the Sensex and Nifty favoured the gainers with the Sensex closing with 16 advancing stocks and 14 in the red, while the Nifty had 27 gainers and 23 losers. Among the broader markets, the BSE Mid-cap index gained 0.33% and the BSE Small-cap index rose 0.21%.

In the sectoral space, the BSE Capital Goods index (up 2.35%), BSE Auto (up 1.86%) and BSE Consumer Durables (up 0.45%) were the top gainers. The major losers were BSE Metal (down 0.79%), BSE Oil & Gas (down 0.67%) and BSE TECk (down 0.66%).

Jaiprakash Associates (up 3.31%), BHEL (up 3.30%), Reliance Communications (up 3.27%), Larsen & Toubro (up 3.17%) and Tata Power (up 3.09%) were the key performers on the Sensex. Reliance Infrastructure (down 3.30%), Bharti Airtel (down 2.12%), Infosys Technologies (2.02%), Tata Steel (down 1.72%) and Sterlite Industries (down 1.70%) settled at the bottom of the list.

Food inflation declined by more than a percentage point to 10.39% for the week ended 19th February from 11.49% in the previous week and 21.62% in the corresponding period a year ago. The fall in food inflation has been attributed to a reduction in prices of onions, potatoes and pulses. However, prices of fruit, milk and vegetables as a group continued to remain high. The decline in the prices of certain food items will have a favourable impact on headline inflation in February.

Headline inflation, as measured by the wholesale price index (WPI), stood at 8.23% in January, much above the comfort level of 5%-6%.

Recovering from steep losses incurred in the previous session, markets in Asia-with the exception of the Shanghai Composite-closed with modest gains, as the recent market decline made stocks cheaper for investors. However, concerns about the turmoil in the Middle East and the fall-out on crude prices made market participants nervous. The South Korean benchmark rose following an increase in industrial output in January, mainly on exports. On the other hand, speculation over another round of rate-tightening pushed the Chinese market lower.

The Hang Seng advanced 0.32%, the Jakarta Composite rose 0.24%, the KLSE Composite gained 0.51%, the Nikkei 225 surged 0.89%, the Straits Times was up 0.33%, the Seoul Composite jumped 2.20% and the Taiwan Weighted ended 1.37% higher. On the other hand, the Shanghai Composite declined 0.34%.

Oil slipped for the first time in three days in New York after reports that Venezuela has offered to mediate a resolution to the crisis in Libya. Crude for April delivery slid as much as $1.86, the biggest decline since 24th February to $100.37 a barrel in electronic trading on the New York Mercantile Exchange. It settled at $102.23 a barrel on Wednesday, the highest since 26 September 2008.

Brent crude for April settlement fell as much as $3.26, or 2.8%, to $113.09 a barrel on the London-based ICE Futures Europe exchange, the biggest decline since 12th November.

Gold, which touched a record $1,440.32 an ounce on Wednesday in London, is expected to ease on news that Libya's Muammar Qaddafi and Venezuelan president Hugo Chavez have discussed steps to resolve the crisis.

Back home, foreign institutional investors were net buyers of stocks worth Rs418.51 crore on Tuesday. Similarly, domestic institutional investors were also net buyers, pumping in Rs95.64 crore in the equities segment that day.

Siemens Healthcare Diagnostics has received approval from the Gujarat High Court for its merger with Siemens (up 0.64%). The company had already received similar approval from the Bombay High Court on 28 January 2011.

Siemens is the Indian arm of Siemens AG, a German infrastructure solutions company, which recently announced an open offer to buy a 20% stake in Siemens at a price of Rs930 per share, translating into a total cost of Rs6,200 crore.

Media firm NDTV (up 2.47%) has completed the process to sell 49% stake for $40 million (about Rs180 crore) in its arm NDTV Lifestyle Holdings Pvt Ltd (NLHPL) to Astro All Asia Networks Plc. By a subscription of shares for $40 million, Astro All Asia Networks now has an effective indirect stake of 49% in NLHPL.

Last September, NDTV had announced it was entering into a strategic alliance with South Asia Creative Assets Ltd (SACAL), a subsidiary of Astro All Asia Networks Plc, for lifestyle channels in India.

Panacea Biotec (up 1.27%) has signed a non-exclusive marketing agreement with Uruguay's Laboratorios Clausen SA, allowing the Latin American firm to market the Indian company's organ transplant drug, Pangraf in Europe.

The deal which will begin from the first quarter of the next fiscal is expected to rake in about $12-15 million over the next two years. With this agreement, the Delhi-based firm will be able to explore further opportunities in new global markets.