MUMBAI: Mixed cues from the global markets and absence of any fresh triggers resulted in a subdued opening for the Indian markets. The sentiment continued through the day and all attempts to move higher were followed by profit booking resulting in a flat close albeit with a positive bias for the day's trade. A subdued response for the NMDC FPO also cast an overhang on the stocks as well as the overall markets.

While the recent underperformers such as oil & gas and FMCG stocks garnered investors' interest, those from the metal, capital and IT space bore the brunt of profit booking. The sectoral churn was high with the hitherto favoured few being replaced by the underperformers. Notably the churning was quick and the movement (either positive or negative) was not very sharp. As a result, most traders missed capitalising on this opportunity.

The recent trend has been lower volumes and absence of fresh buying at higher levels, a clear indication that the Indian market is fast running out of steam. Unless there are fresh triggers in the offing, the much awaited meaningful correction may take place anytime soon. Notably, the Nifty seems have made a double top near 5,150 points levels. Technically this is a bearish signal.

However, the underlying trend remains positive with strong support at 5,060-5,070 levels and thereafter at 5,000 on the Nifty. Sharp reversal could happen only if the market slips below these levels and any movement on the downside could be used as a buying opportunity. Watch out for some aggressive profit booking in the sharply run-up counters from the mid-cap and small-cap space.

Further, as the global markets lack direction, Indian markets may await the outcome of IIP numbers during the end of the week and thereafter announcement of advance tax numbers for a clear trend. The headline inflation number which is to be announced tomorrow will also have its impact, albeit for a short time.

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