The International Monetary Fund sold 2 metric tons of gold to the central bank of Mauritius

Ben S. Bernanke said it’s “not obvious” that asset prices in the U.S. are out of line with underlying values after a 64 percent jump in the Standard & Poor’s 500 Index from its March low. The International Monetary Fund sold 2 metric tons of gold to the central bank of Mauritius for about $71.7 million, a move that may be followed by emerging-market nations trying to diversify their currency reserves. Ben Bernanke said the central bank will monitor the sliding U.S. dollar but pledged anew to keep interest rates at record lows to nurture the economic recovery. Retail sales rose more than expected in October largely due to a big rebound in auto sales. But broader consumer spending remains under pressure, raising questions about the durability of the recovery. Warren Buffett almost doubled his stake in Wal-Mart, adding 18 million shares in the discount retailer, Wal-Mart, in the third quarter of 2009 and adds new stakes in Nestle, Exxon Mobil and Republic Services. Stimulus package would remain for some more time and an exit at any point of time in future would be in a gradual manner. 14% appreciation in rupee since the month of March is affecting the exporters. FII investment in Indian equities could reach record high levels this year, as global investors borrow cheap in developed nations and invest in high-yielding assets of emerging markets such as India which may push up policymakers to consider measures to contain the inflows, although reluctantly. Engineering BPO revenues are set to hit USD55 billion with newer customers, including automakers Renault, Volkswagen and Harley Davidson, looking to outsource their complex design engineering projects to India. State-owned oil firms raised fuel price, by 2.4 per cent, second time this month. The RBI survey is bullish about corporate profits this year. The disinvestment in SAIL and NMDC is expected to fetch the government a sum of Rs.30,000 crore. A possible merger between SpiceJet and GoAir has hit a roadblock after the two sides failed to arrive at a consensus on valuation and branding related issues. Bharat Forge is planning an investment of up to Rs.50,000 crore in the power sector. Shopper Stop will invest Rs.250 crore in the next three years to add another 15 stores. HDFC Standard Life Insurance expects to break even by 2011-12 as it aims to bring down operating expense ratio to about 20% in the present financial year. ICICI Bank is planning to put car and truck loans on the fast track. However, the Bank would be cautious in lending to 2-wheelers. SAIL has cut steel prices of some of its products by Rs.500 per tonne. Aban Offshore has raised USD150 million through the QIP route. Michelin plans to invest a sum of Rs.4000 crore in Chennai plant for manufacturing truck and bus radial tyres.

Technical View:

Nifty: (5058): The index opened on a positive note and saw strength throughout the day’s trading session. It ended the day with gain of 1.18%. The index has closed on a positive note above the 5000 level suggesting strength should continue in the near term. On the upside sustaining above 5000 can see index test higher level. Resistance levels are around 5100-5160 levels. On the downside index has support around 5025,lower support is around 4990. Nifty Nov contract ends the day up by 59.80 points at a premium of 4.40 points in Nov contracts adding OI by 0.7% across all active Nifty contracts. Nifty Open Int PCR at 1.580 compared to 1.556 yesterday on back of addition of 12.51 Lakh Nifty puts and .901 Lakh calls. Nifty VIX at 27.95 from 29.09 yesterday. Highest OI in Nifty put at 4800 Nov strike and calls is at 5100 Nov strike. FII side saw long liquidation in Nifty futures and short build up in stock futures and Nifty options was bought. Long build up over the day seen in ABAN, DLF, EKC, ICSA, FINANTECH, ZEEL, SESAGOA, DCHL, NOIDATOLL etc. Long liquidation seen in PANTALOONR, HINDZINC, PFC, LITL, STER, GVKPIL, JSWSTEEL & MARUTI etc.

Analysis and Outlook:

Nifty Nov 5000 strike pared OI during the day and highest OI in Nifty calls has now shifted to 5100 strike indicating resistances moving up to 5150 levels with the chances of markets retesting the recent highs highly likely. Nifty OI PCR has continued to move up and VIX was seen moving down over the day indicating positive bias.