Close : Consolidation process !

Market slipped into negative territory right from the word go. and continued to venture further in the negative territory with every progressing hour on selling pressures witnessed throughout the day. Sensex however ended marginally positive on the back of buying in selective Index Heavy weights. Profit taking was seen in Bajaj Auto and Hindalco who lead the yesterdays rally. There was not much support from Global front as the Asian Indices ended mixed while their European counter parts were in red. The positive is that ECB and Bank of England have both kept interest rates unchanged. ! But really this is largely expected and so markets have not taken any positive cue from the same.

Sensex is closed up by 9 points at 14652 helped up by gains in ICICI Bk (997.9,+2 percent), Maruti (963.15,+1 percent), Rel Energy (565.85,+1 percent), Ranbaxy (421.5,+1 percent) and RCVL (489,+1 percent). Restricting the gains were Hindalco (175,-4 percent), Bajaj Auto (3008.25,-2 percent), HLL (205.15,-1 percent), Hero Honda (726.2,-1 percent) and Wipro (634.95,-1 percent).

There were some concerns regarding Cement Sector in a report by CRISIL. CRISIL opined that the Cement demand is expected to grow, on an average, by 9-10 per cent each year over the next 3 years due to healthy activity in end-user segments like housing, infrastructure, commercial construction etc. According to CRISIL bright prospects in the industry had attracted players - large and small - enough to have them announce capacity expansions (either greenfield or brownfield). The announced expansion exceeds 90 million tonnes - approximately 55 per cent of the current industry size. While this expansion may not notably influence the demand-supply situation over the short term, with more capacities materialising, operating rates as well as prices in the country would be significantly affected. CRISIL research expects supply to grow by a CAGR of 11 per cent over the next 5 years, exceeding the growth in demand. This is expected to bring down operating rates all across the country. But we are positive on this sector. Valuations are at high levels and thats where we believe could bring in the profit taking on such a report. Taking profits in Cement may not be a bad idea with a trading perspective. We believe cement prices will head higher in the next 12 months. Corrections should offer an opportunity when they come.

Eveready rallied on news that Hindustan Zinc had cut prices by 8.3%. Zinc is now priced at Rs. 1,59,100 a ton against Rs. 1,73,500 a ton. Eveready had reported a loss which was mainly due to the rise in Zinc prices. Eveready stands to gain from lower prices. With a wow call on in Eveready the gains for our patrons has been good and will be good going ahead too. The Stock ended the day higher 5%.

Punjab Tractors which rallied yesterday on Mahindra and Mahindras bid saw more gains today as well. Escorts confirmed that they were bidding for a stake in the company. Other firms like Sonalika's International tractors and TAFE have also shown interest for a stake in the company. This provided enough fuel for the stock to rally as the stock ended the day higher by 11%. The acquirer would benefit from this acquisition as it would increase market share by 10% also enable it get a hold of a manufacturing facility in the potentially huge Northern market.

Technically Speaking : As expected we have reached our first target of 14,700 and witnessed some profit booking after hitting the target yet there seems to be good support at lower levels. Declines outnumbered the Advances for the day as there were 1043 advances against 1613 declines. Sensex ranged between an intra day high of 14,698 and low of 14,523. Volumes were pretty good at Rs. 4,466 cr. Levels to watch above 14,700 is 14,850. Do keep reading for more.