The domestic markets made a subdued close on Thursday; the benchmark indices that started on a flat note on weak global cues remained in somber mood throughout the day. There was a slight recovery attempt in the second half but that too proved futile and the indices closed lower after a very choppy session of trade, the volume remained low and the breadth in negative terrain. The two-day rally finally got a halt as the oil & gas, metals and realty stocks remained under pressure right through the day. PSU sector too was in a bit somber mood as the government has priced the follow-on public offer of Rural Electrification Corporation (REC) at Rs 203 per share, 7.5% lower than the prevailing market price. Investors were seen booking profits from the previous two session's gain amid nervousness that recent rally has gone too far and correction might be round the corner with central budget to be announced next week. The market heavyweights were putting pressure and lacked active participation. Reliance Industries' attempt to buy LyondellBasell Industries appeared to hang in balance after creditors of the bankrupt petrochemical company reached an agreement with its current management valuing it considerably more than the Reliance bid. The broader indices that initially showed some strength lost its way in the latter half and declined with the benchmarks. The fertilizers stocks made some headway in the last minutes when the new fertilizer policy was announced. Finally the BSE Sensex closed at 16,327.84, down by 101.07 points or 0.62% while the S&P Nifty lost 26.25 points or 0.53% at 4887.75.

The US markets continued their upmove on Thursday on the back of good report on manufacturing.Philadelphia Federal Reserve said its index of regional manufacturing rose to 17.6 in February from 15.2 in January. The report lifted stocks of companies that process raw materials because increased manufacturing should boost sales. There was also report of a pickup in business at the nation's factories. The Dow Jones Industrial Average rose 83.66 points, or 0.81%, to 10,392.90.The broader Standard & Poor's 500 index was up by 7.24 points, or 0.66%, to 1,106.75 while the Nasdaq composite index closed higher by 15.42 points, or 0.69%, to 2,241.71, its fifth straight advance.

Crude prices surged on Thursday to their five week high and ended above $79 a barrel. Improved readings on manufacturing and overall growth amid worries over Iran's nuclear program helped the crude prices move higher. The upbeat mood overshadowed the Energy Information Administration's (EIA) report showing a larger-than-expected build in domestic crude inventories last week. Crude for March delivery settled up $1.73, or 2.24 percent, at $79.06 a barrel, the highest close since January 14, on the New York Mercantile Exchange. In London, April Brent crude ended up $1.51, or 2 percent, at $77.78 a barrel.

The Indian rupee pared some of its previous day's gains on Thursday as the dollar strengthened overseas. The domestic currency started weak tracking the sluggishness in the regional equity markets and when the local equity markets too turned soft, rupee followed the suit fearing fund outflow. Rupee has touched its two week high of 45.95 in the previous session. The US dollar was trading firm against a basket of currencies. Finally the rupee closed at 46.27/28, 15 paise lower compared to its Wednesday's close of 46.12.

The FII on Thursday were the net buyers in both equity as well as debt segments. In equity segment the gross buying was of Rs 2977.00 crore against gross sell of Rs 1753.10 crore, while in the debt segment the gross purchase was of Rs 682.60 crore with gross sales of Rs 550.20 crore.

The US markets continued their rally for the third consecutive day on good reports of manufacturing; all the major indices were up by about half a percent. The Asian markets are not looking in good health as after the markets hours in US, the Federal Reserve announced to increase the discount rate that it charges banks for emergency loans. The move doesn't change consumer borrowing rates but the general perception is tightening of any type is step forward in the way rollback. The domestic markets closed lower in previous session led by the declines in the heavy weights. The mood today is likely to remain somber, fetriliser stocks are likely to remain in limelight after the announcement of new urea policy.

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

                                                          Nifty Top volumes

• Suzlon Energy has bagged an order from L&T Infrastructure Development Projects to set up, operate and maintain an 8.7 MW wind energy project.
• Hindalco's subsidiary Novelis has posted a net profit of $68 million for the third quarter of FY2010 against a net loss of $1.8 billion.
• SingTel, the largest foreign shareholder in Bharti Airtel, is actively supporting the negotiations to take over the African assets of Kuwait-based Zain group by Bharti.
• Axis Private Equity, the Axis Bank-sponsored PE arm is mulling restricting move targeted at creating an independent unit.
• BPCL has informed that gas had been discovered at an offshore Mozambique find, in which its overseas subsidiary holds a 10 per cent stake.