Mumbai (India): Indian equities traded in a tight range during previous week in a range of 5560-5410. Nifty closed in red in three out of five trading days as sentiment turned negative on account of Japan Earthquake and unrest in MENA region and rising crude prices.

On a week-on-week basis, the Sensex was down by 312 points or -1.7%, to close at 18174.39 levels.

The S&P CNX Nifty also closed in the red down by 93 points, or 1.7%, to close at 5445 for the week.

Metals, Capital Goods and Banking stocks were the major losers, with heavy weight such as Tata Steel, L&T, BHEL, State Bank faced selling pressure, where as Reliance Industries and Reliance Capital were the major gainers.

Food inflation for the week ended February 26, 2011 was 9.52% (v/s 10.39% last week). In February 2011, exports were $23.6 bn (49.8% growth YoY) while imports were $31.7 bn (21.2% gr wth YoY). IIP nos for January 2011 came at 3.7% (street estimates: 2.7%) while the December IIP was revised from 1.6% to 2.5%.

Rising oil prices took a toll on the US economy as the cost of imported crude helped widen the trade gap and consumer confidence was shaken by the most expensive gasoline since 2008.

The deficit in goods and services increased 15% in January 2011 to $46.3 billion from $40.3 billion the month before. Imports increased 5.2% in January, the most since March 1993, reflecting a gain in oil prices and purchases of business equipment and consumer goods.

Applications for unemployment benefits increased by 26,000 to 397,000 in the week ended March 5. UK manufacturing production jumped in January by the most in 10 months, a sign the economy is resuming growth after a winter freeze dented the recovery.

Credit rating of Spain was cut to Aa2 by Moody Investors Service, which said the cost of shoring up the banking industry will eclipse government estimates. The euro weakened and Spanish bond yields rose.

Overall the unrest in MENA region and rising crude prices arrested an increase in equity prices.

In the current week, Nifty mostly moved in the range after last week post budget bounce back. Unrest in MENA region and crude oil (Brent) remaining more than $110 will weigh on the Indian markets. In the month of March, FII have been net sellers to the tune of 1491 crores while domestic funds are net buyers to the tune of 81 crores.

Among the key global data to watch for in current week is US import price index, Building permits, US produce price index, US consumer price Index and UK Nationwide consumer confidence index.

Important events which the markets will be tracking closely are RBI Credit policy on March 17.

On the higher side, 5490 is the immediate resistance from the 5 days EMA (Exponential moving Average) sustaining above which on a closing basis can see the index testing 5595 where it has resistance from 200 days EMA.