Domestic equity markets settled in the green for third consecutive day on Tuesday underpinned by positive cues from the world-wide equities. Investors rushed for metal stocks following surge in commodity prices. Markets started the day on a cheerful note tracking good gains in most of the Asian markets which helped the benchmark indices to touch fresh 52-week highs in early trades. However, they lacked steam to extend these gains further. Subdued start to European markets caused some jitters back home in afternoon trades but the bears could not steal the show from the roaring bulls. Soothing comments from chief economic advisor to the finance ministry Kaushik Basu also fuelled confidence among market participants in trade. He said that there was no need to tighten the monetary stance immediately. Broader indices outperformed the benchmark indices in trade. Nalco, up almost fifteen percent, was the star performer of the day. New listing -- Godrej Properties -- also received overwhelming response from investors and it ended at a premium of about 10%. Finally, the BSE Sensex added 127.51 points or 0.73% to settle at 17,686.24, while the S&P CNX Nifty advanced 45.70 points or 0.87% to end at 5277.90.

The US markets closed mixed on Tuesday, Dow closed lower while the S&P and Nasdaq closed flat. It was few economic reports giving mixed signals that led to a break in the Dow's rally. The Commerce Department reported that factory orders rose by more than twice what had been expected in November, reflecting demand in the steel, computer and chemical industries. But on the same time the National Association of Realtors said its index of pending home sales fell 16 percent, the first drop after nine months of gains, an indication that sales will fall this winter. The Dow Jones industrials Average lost 11.94 points, or 0.11%, to 10,572.02. The broader Standard & Poor's 500 index rose 3.53 points, or 0.31%, to 1,136.52, its highest close since October 1, 2008. The Nasdaq composite index closed up by marginal 0.29 points, or 0.01%, to 2,308.71.

Crude prices continued their surge on Tuesday and the benchmark crude prices closed higher than they had on any day last year despite a report of a surprise increase in distillate stocks overall and strength in dollar. Benchmark Crude prices closed up 26 cents at $81.59 a barrel Tuesday, the highest settlement price on the New York Mercantile Exchange since Oct. 9, 2008. In London, Brent crude for February delivery rose 47 cents to settle at $80.59 a barrel on the ICE Futures exchange.

The Indian rupee continued its momentum and touched its fresh one month high of 40.08/09 on Tuesday tracking the continued rally in the local stock markets and the weakness in the dollar. Most of the regional currencies too traded strong compared to the dollar. Finally the rupee closed at 46.26, almost flat compared to its Monday's close of 46.25.

The FII on Tuesday were the net buyers in the equity segment with gross buying of Rs 1621.60 crore against gross sell of Rs 920.00 crore, while in the debt segment they were the net sellers with a gross purchase of Rs 636.90 crore against gross sales of Rs 807.10 crore.

The US markets closed mixed on Tuesday, there were mixed economic signals that led a consolidation in the markets pending home sales declined by whooping 16% but that must be because people were earlier investing to take the benefits of tax breaks. The Asian markets have made a good start and most of the indices are trading up by about half a percent indicating a good start for the domestic markets. The local markets managed to continue their New Year rally and the participation of foreign investors in previous trade is indicating the good show to continue.

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

                                                          Nifty Top volumes

• Financial services major Indiabulls Financial Services has reduced stake in Suzlon Energy to 0.6%, by way of releasing pledged shares.
• IDFC's project equity division is weighing investment in a greenfield power plant being set up by Monnet Power and Energy.
• Maruti Suzuki is planning to have an output of 15 lakh units by 2015 to maintain its 50 per cent market share in the Indian car market.
• ACC has inaugurated a 1.2 million tonne cement plant at Kudithini village in Karnataka at an investment of Rs 370 crore. 
• Mahindra & Mahindra launched two heavy commercial vehicles at the Auto Expo 2010, marking its foray into the heavy commercial vehicles segment.

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