Short covering in rate sensitive -- banking and realty pivotal -- post monetary policy review from the Reserve Bank of India (RBI) helped the domestic equity markets to end the day in the green on Friday. The markets kicked off trade on a weak note tracking subdued global cues. The indices witnessed sharp decline in late morning trades after the apex bank hiked the cash reserve ratio (CRR) by 75 basis points (bps) against the general expectation of 50 bps hike. Meanwhile, the central bank kept the repo and reverse repo rates unchanged in its policy review, which triggered immediate recovery in the indices. The markets traded choppy before starting their upward journey to finish higher. ICICI Bank, BHEL and SBI led the intraday recovery in the benchmark indices. The BSE's 30-share Sensex and NSE's 50-share Nifty managed to claw back above the psychological 16,000 and 4800 levels in trade. Upward revision in growth forecast for the economy from the RBI also boosted market participants' confidence. Software stocks, which were beaten down in trade, also managed to wipe-off most of their losses while fast moving consumer goods, metal and technology stocks restricted the gains on the bourses. The broader indices outperformed their larger counterparts. Finally, the BSE Sensex gained 51.09 points or 0.31% to shut shop at 16,357.96 while the S&P CNX Nifty advanced 14.80 points or 0.30% to end at 4882.05.

The US markets closed lower on the last trading day of the month and week. The major indices made a good start after the Commerce Department reported that the gross domestic product, expanded at an annual rate of 5.7 percent during the fourth quarter, better than the forecasts of 4.5 percent. But it was the concern in the minds of investors, whether the economy will be able to sustain its big fourth-quarter growth rate, which pulled the markets down. The Dow Jones Industrial Average lost 53.13 points, or 0.52% to 10,067.33. The S&P 500 index fell 10.66 points, or 0.98%, to 1,073.87, while the Nasdaq composite index closed lower by 31.65 points, or 1.45%, to 2,147.35, following a disappointing earnings report from Microsoft Corp.

Crude prices declined further on Friday and once went below $72 a barrel as the dollar continued its surge against euro. Crude prices have declined more than 8 percent for the month. There were reports that US oil demand shrank 2 percent in the past four weeks from a year earlier, while Japanese data showed crude imports fell 2.6 percent in December and gasoline sales tumbled 2.4 percent, lagging energy demand led the crude prices decline. Benchmark crude for March delivery fell 75 cents to settle at $72.89 a barrel on the New York Mercantile Exchange. In London, Brent crude for March fell 67 cents to settle at $71.46 a barrel at ICE future exchange.

The Indian rupee closed higher on Friday, It was crucial day as RBI announced its monetary policy review. The apex bank left its short-term interest rates unchanged but raised banks' CRR by 75 basis points, to be implemented in two phases, and warned of rising inflation. The domestic currency made a cautious start owing to the subdued equity markets and once touched its one month low, month end dollar demand from oil refiners too was seen putting pressure in the early trade but when the equity markets started recovering the rupee followed the trend and pared its losses. Finally the rupee closed at 46.16/17, 20 paise stronger compared to its Thursday's close of 46.36.

The FII on Friday were the net sellers in both equity as well as debt segments. In equity segment the gross buying was of Rs 3496.10 crore against gross sell of Rs 5659.90 crore, while in the debt segment the gross purchase was of Rs 1144.00 crore with sales of Rs 1365.40 crore.

The US markets closed lower once again on Friday, though the news from economy front was good as the GDP showed a better than expected growth in fourth quarter but it also bought circumspection, whether the momentum can be continued or not. The Asian markets have a made a weak start and most of the indices are trading in red with China suffering the most. The domestic markets made a smart come back on Friday and recovered from a significant low to close in green. The global cues are indicating for a soft start for the local markets today. Result session is almost over with few major companies left to announce their quarterly numbers, during the weekend some big companies like RCom, RNRL, PTC, RCF and FT India came up with their December quarter numbers and are likely to see some movement based on their performance.  

Support and Resistance: S&P CNX Nifty and BSE Sensex

                                                          Nifty Top volumes

• The government has cleared the FDI proposals of Unitech Wireless, for acting as an operating cum investing company.
• DLF is looking at raising Rs 1,250 crore by exiting projects, selling land plots and a refund from the Haryana government.
• Tata Steel will collaborate with Nippon Steel Corporation (NSC) for production and sales of automotive cold-rolled flat products.
• Cipla has reported a net profit rise of 29.35% to Rs 289.03 crore for December 2009 quarter against Rs 223.44 crore in the same quarter last year.
• ACC has acquired a 100% equity stake in Encore Cement & Additives, making it a wholly owned subsidiary.