After opening on a flat note and looking for some direction from the credit policy, the bulls were in control as the CRR, Repo and Reverse Repo rates remained unchanged in the credit policy declared. The Sensex closed up 208.39 points or 1.50% at 14136.72, while the Nifty was up 56.70 points or 1.39% at 4141.8. Broad market indices too gained although they did not outperform. The BSE Mid Cap Index ended 0.75% higher at 5,745.34 while the BSE Small Cap Index ended 0.47% higher at 7,003.63. Market breadth was flat. NSE cash turnover was at Rs.10884.86crs. Vs. Rs.7687.61crs. yesterday.

With rates unchanged interest rate sensitive stocks were among the top gainers. Bank stocks led the uptrend followed by Auto, Metal, Telecom, Media and Oil & Gas. IT stocks were the underperformers due to the strengthening rupee. The BSE Bankex was up 4.06% at 7,161.40 as Canara Bank, Oriental Bank, Bank of India, PNB, SBI, Bank of Baroda and IOB ended higher. The BSE Auto Index closed 1.65% higher at 4,882.03 while the BSE Metal Index closed 1.5% higher at 10,043.87. The BSE Oil and Gas Index closed 1.4% higher at 7,203.64 and the BSE Health Care Index was up 0.7% at 3,766.90. The BSE FMCG Index gained 0.6% at 1,792.53 and the BSE Capital Goods Index was up 0.2% at 9,794.62. The BSE IT Index lost 0.7% at 5,027.29.

With the uncertainty owing to the credit policy announcements out of the way, markets are once again moving up with higher volumes and momentum. We expect this momentum to continue as the main indices now proceed towards their lifetime highs.

Traders can expect a lot of volatility during this upward journey as nervous traders who had bought at these highs in February 07 would be looking for an opportunity to exit from their positions in order to minimize their losses. We recommend traders to hold on to their positional longs and fasten their seat belts. The bull ride is going to be bumpy as we enter turbulent weather.