The markets opened on an extremely weak note on Monday and were trading in the deep red till noon but saw swift recovery post lunch. Buying was seen in select technology, auto, metal, oil and telecom stocks.

The Sensex closed down 36.21 points, or 0.26%, at 13872.37 and the Nifty closed up 4.4 points, or 0.11%, at 4087.9.

Technology stocks led the uptrend due to a depreciating rupee against the dollar. Midcap and smallcap stocks held out their gains and outperformed the frontline indices.

ICICI Bank, Cipla and HLL numbers did not please the markets and are among the losers. However, Reliance Communications’ results were above street expectations taking it into the list of top gainers.

The top gainers on the Sensex were Reliance Communications, Hero Honda and Tata Steel, while the top losers were ICICI Bank, HLL and Cipla.

Investment advisor P N Vijay, said, “The big knock we got on Friday was calming because we have had a very strong rise for quite some time. Though blue chips like Reliance and Bharti going down was a bit unnecessary, today one actually expected the market to be fairly flat. I am pleasantly surprised to see buying interest that’s come in the last one hour, probably driven by strong numbers from some of the key companies which are reporting.”

He feels that markets will improve in May with inflation flattering out.

“Markets are going to improve in May except that the holiday effect will start and generally volumes will go down in India. But in terms of market fundamentals, we have passed through a very tough period on interest rates, we have never seen this type of interest rate increase in this bull market and the market were a bit shocked and there was also no let up in the inflation rate. Inflation seems to be flattering out with a slight downward bias, which we expect to improve as the crops come in. Going into May, results have not had any negative surprises, so I expect May to be positive over today’s closing,” he added.

R Rajgopal, Head of Equities, DBS Chola, said, “Midcaps are very scrip driven, its very news driven, very specific about results pertaining to each company that comes out. One has to be very careful, we cannot broadly comment that midcaps as a general theme would run away. I would rather say that it would be more news as well as results driven in the sector.”

He feels that one should remain invested fully. “My philosophy is that in open-ended schemes, the fund managers should not keep any cash. If at all its needed it must be in single digits to tide over liquidity. I believe that at all points of time there are opportunities that exist and one needs to buy into those stocks, which look undervalued. So my asset call between cash and equity would be remain invested fully,” he added.