Market may get Fed-Rate-Cut lift

On Friday US Federal Reserve cut its discount rate or the rate at which it lends to its member banks, by 50 basis points to 5.75%. All the European indices took the cue and rose over 2% on Friday. The same boosted the major Asian indices in early trades today and currently are up around 4-5%. Among the local indices, the Nifty could test 4170 on the upside and may slip to 4050 on the downside. The Sensex has a likely support at 14100 and may face resistance at 14500.

Major US indices registered significant gains on Friday after the Federal Reserve cut its discount rate, easing worries about the credit and mortgage markets. While the Dow Jones flared up by 233 points at 13,079, the Nasdaq moved up by 54 points to close at 2,505.

Except Dr Reddy's Lab and Patni Computer all the Indian ADRs traded firm on the US bourses. ICICI Bank led the pack with gains of over 12% while HDFC Bank, VSNL , Wipro and MTNL jumped over 5-8% each. Among other gainers Satyam, Infosys, Tata Motors and Rediff added around 1-4% each.

Crude oil prices advanced further, with the Nymex light crude oil for September delivery gaining by 98 cents to close at $71.98 a barrel. In the commodity space, the Comex gold for December delivery gained $8.80 to settle at $666.80 an ounce.