Mixed indications

F&O OUTLOOK

India's benchmark stock index rose to its highest in almost two months on expectations that the central bank would not signal a rise in the interest rates at its policy meeting next week.

The market's rise shows that investors now believe that we are at the end of the cycle of interest rate increases, R K Gupta of Credit Capital Asset Management told Bloomberg. The run-up in the banking stocks suggests that the investors do not expect another round of rate tightening next week.

The market clues derived from the Nifty call and put options suggest that strong support exists at 4050 levels as OI of Nifty 4050 put increased by 4.25 lakh shares. However, there is a strong resistance at 4100 levels as OI of Nifty 4100 call has increased by 8.25 lakh shares. 

F&O SNAPSHOT
	Turnover (Rs crore)*		Open Int ('000)**
	Apr 13, 07	Apr 20, 07	Apr 13, 06	Apr 20, 07
Nifty	58630.67	77377.32	71915	81460
BANKNIFTY	331.3	477.71	124	190
CNXIT	35.26	36.97	18	20
Stock	62608.38	79409.87	1095219	1194766
NSE total	121605.6	157301.9	1167276	1276436
*Weekly aggregates notional Value, **In shares

Banking, Healthcare and FMCG indices look good for further upsides. While IT and Auto are in uptrends, they could see some weakness and should therefore be bought on declines. Metals can also be avoided for the time being due to their recent sharp run up.

The broad market indices such as the BSE Mid Cap and BSE Small Cap are in good shape and are likely to see further upsides once the momentum in the market picks up. HSBC analysts expect the market to consolidate between the reversal levels of 13000/3800 and targets of 14020/4050.