Volatility ruled the roost as profit booking dragged shares off highs in early afternoon trade. The barometer index BSE Sensex was slightly higher, but the 50-unit S&P CNX Nifty was in the red. The Nifty fell below the psychological 6,000 level, having regained that level in intraday trade. Nine out of 13 sectoral indices on BSE were in positive zone. Mid and small-cap stocks witnessed selling pressure.

On the global front, investors are watching Spain's bond auction later in the global day. A poor outcome could cause concerns over euro-zone's debt to flare up. Spain will auction 3 billion-4 billion Euros of long- and ultra-long government bonds maturing October 2020 and July 2041, respectively.

The BSE 30-share Sensex was up 24.35 points or 0.12%, off close to 167 points from the day's high and up close to 274 points from the day's low. The Sensex was below the psychological 20,000 mark, after regaining that level earlier in the day. A steep sell-off on Tuesday, 16 November 2010, had pulled the Sensex and Nifty had below the psychological 20,000 and 6,000 levels respectively. The stock market was closed on Wednesday, 17 November 2010, for a public holiday.

Intraday volatility was high as traders rolled over positions in derivatives segment from the near month November 2010 series to December 2010 series ahead of the expiry of the November 2010 contracts next Thursday, 25 November 2010. The market pared gains after a firm start. The Sensex slipped into the red in morning trade. The market cut losses after falling sharply to hit fresh intraday low in mid-morning trade. The market regained positive zone in early afternoon trade. The market pared gains in afternoon trade.

NSE's volatility index, India VIX, a gauge of traders' perception of near-term risks in the market based on options prices, was up 0.66% at 21.270. The index had risen 4.34% to 21.13 on Tuesday, 16 November 2010. The index had lost 6.38% to 20.25 on Monday, 15 November 2010, a day after Friday's (12 November 2010) sharp surge. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days.

The food price index rose 10.30% while the fuel price index climbed 10.57% in the year to 6 November 2010, government data on Thursday showed. In the prior week, annual food and fuel inflation stood at 12.30% and 10.67% respectively. The primary articles price index was up 13.30% in the latest week compared with an annual rise of 14.87% a week earlier.

Asian stock markets were higher Thursday as European officials sought a way to fix the region's debt crisis and China appeared poised to cool rising food costs with price controls rather than interest rate hikes. The key benchmark indices in China, Hong Kong, Japan, Taiwan and South Korea rose by between 0.34% to 2.06%. But, the key benchmark indices in Singapore and Indonesia fell by between 0.13% to 0.21%.

Britain, which is not part of the 16-nation bloc that uses the euro, offered Wednesday to provide additional support to Ireland beyond what it gets from the European Union or the International Monetary Fund.

Trading in US index futures indicated that the Dow could gain 63 points at the opening bell on Thursday, 18 November 2010.

Closer home, the Supreme Court today, 18 November 2010, asked the Centre to file an affidavit on Prime Minister's silence on Janata Party president Subramaniam Swamy's petition seeking sanction to prosecute former telecom minister A Raja in the 2G spectrum scam case. The Supreme Court asked the Centre to file the affidavit by Saturday and fixed the hearing on Tuesday. The SC wants the affidavit to be filed on behalf of the Prime Minister by a responsible officer explaining the 11 long months inaction and silence.

The court had on Tuesday, 16 November 2010, asked the government to explain within two days why the "sanctioning authority" - in this case, the Prime Minister - remained silent for 11 months over a request seeking sanction for the prosecution of A Raja in the 2G case.

On the macro front, India's exports in October 2010 rose an annual 21.3% to $18 billion, while imports for the month grew 6.8% on the year to $27.7 billion, Trade Secretary Rahul Khullar said on Monday, 15 November 2010. Khullar said exports could touch $200 billion in the fiscal year that ends in March 2011 (FY 2011). He also said that the trade deficit will not top $135 billion. The trade deficit had widened to a 23-month high of $13.06 billion in August 2010 and Khullar had said the deficit could touch $135 billion for FY 2011, higher than his earlier forecast of $120 billion. The government is targeting close to 15% export growth in the current fiscal.

The wholesale price index rose 8.58% in October 2010, a touch slower than 8.62% increase in September 2010, data released by the government Monday, 15 November 2010, showed. The annual reading for August 2010 was upwardly revised to 8.82% from 8.5%.

Industrial output in September 2010 rose at a much slower-than-expected 4.4% in September 2010 from 8.2% a year ago, government data released on Friday, 12 November 2010, showed. The September IIP data is the lowest in 15 months. Meanwhile, the index of industrial production for August was revised upwards from 5.6% to 6.9%.

The Reserve Bank of India (RBI) at its second quarterly monetary policy review on 2 November 2010 hiked its lending and borrowing rates by a quarter point each, as expected, to tackle inflationary pressures. The central bank signaled a pause in its policy tightening drive that began in October 2009. Based purely on current growth and inflation trends, the Reserve Bank of India (RBI) believes that the likelihood of further rate actions in the immediate future is relatively low, RBI governor D Subbarao said in a monetary policy statement. "However, in an uncertain world, we need to be prepared to respond appropriately to shocks that may emanate from either the global or domestic environment," he added.

The RBI said it will continue to closely monitor both global and domestic macroeconomic conditions. "We will take action as warranted with a view to mitigating any potentially disruptive effects of lumpy and volatile capital flows and sharp movements in domestic liquidity conditions, consistent with the broad objectives of price and output stability", the policy statement said. The Reserve Bank of India (RBI) next reviews monetary policy on 16 December 2010.

Foreign funds have made heavy purchases of Indian stocks this year. Net equity inflow in 2010 stands at $28.53 billion, above last year's $17.45 billion. The annual inflows are at record levels this year.

While global liquidity remains ample, a section of the market is worried that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity markets. Indian companies are estimated to raise about Rs 80000 crore from equity and debt issue over the next three to six months. Steel Authority of India and Indian Oil Corp are some of the other state-run firms that are planning large share sales in coming months. The $1.7 billion follow-on public offer of state-run Power Grid Corporation received strong response. The issue was subscribed 14.88 times.

Meanwhile, share sales by the Indian government in state run firms Manganese Ore India (MOIL) and Shipping Corporation of India are likely to hit the market by end-November, while an offer by Hindustan Copper is likely in December, Disinvestment Secretary Sumit Bose said.

Chairman of the prime minister's Economic Advisory Council C. Rangarajan, last week, said that the Indian economy has the capacity to absorb capital inflows of up to $70 billion annually without government intervention. "The quantitative easing by the US Federal Reserve may have implications in terms of capital inflows, but as I had indicated earlier, India's current-account deficit will be around 3% of gross domestic product" this fiscal year, C. Rangarajan said.

On the corporate front, the Q2 September 2010 corporate results have been encouraging. The combined net profit of a total of 3346 firms surged 45.3% to Rs 104427 crore on 19.8% growth in sales to Rs 934118 crore in Q2 September 2010 over Q2 September 2009.

At 13:17 IST, the BSE 30-share Sensex was up 24.35 points or 0.12% to 19,889.49. The Sensex jumped 191.30 points at the day's high of 20,056.44 in early trade. The Sensex fell 249.63 points at the day's low of 19,615.51 in mid-morning trade.

The S&P CNX Nifty was down 9.65 points or 0.16% to 5,979.05.

The BSE Mid-Cap index fell 1.01%. The BSE Small-Cap index fell 1.51%. Both these indices underperformed the Sensex.

The market breadth, indicating the health of the market, was weak, in contrast with a strong breadth in early trade. On BSE, 2094 shares fell while 808 shares rose. A total of 86 shares remained unchanged.

From 30 share Sensex pack, 18 rose and rest fell.

Reliance Communications (down 7.88%), ICICI Bank (down 3.46%), ONGC (down 2.07%), HDFC Bank (down 1.06%) and State Bank of India (down 1.02%), were the leading Sensex losers.

Shares of mobile operator Reliance Communications fell sharply after a government panel highlighted irregularities in 2G spectrum allocation.

Hero Honda Motors (up 5.47%), Cipla (up 3.42%), Hindalco Industries (up 2.24%), Tata Steel (up 1.84%) and Sterlite Industries (up 1.83%), were the leading Sensex gainers.

Hero Honda Motors rose on reports a well-known foreign brokerage has upgraded the stock to 'outperform' from 'neutral' and raised price target to Rs 2,365 from Rs 1,773.

Index heavyweight Reliance Industries (RIL) rose 0.46% to Rs 1035.10. The stock came off the day's low of Rs 1045.20. The stock rebounded after falling for the last six days.

Top gainers in the BSE's 'A' group were, Hero Honda Motors (up 5.47%), Cipla (up 3.42%), Zee Entertainment Enterprises (up 3.20%), Dabur India (up 2.95%) and Lupin (up 2.42%).

Top losers in the BSE's 'A' group were, Reliance Communications (down 7.88%), Indiabulls Financial Services (down 7.09%), Unitech (down 6.93%), DB Realty (down 6.25%) and Syndicate Bank (down 4.61%).