Close: A seesaw ride - and a positive finish

The Railway budget was on expected lines. There was the aura of reforms of digitisation and also the populism. Passenger fares have been cut across the board. This is to compete with airlines. There is no direct increase in freight rates and rationalisation has been done with regards to freight in an attempt to become more competitive. The idea is to sweat the assets more. The positive is from the East West dedicated Freight corridor which is expected to commence in 2007-08 at a cost of Rs 30,000 cr. There is a focus to use IT to increase efficiency ! - Its hats off to the Railway Minister as he has done which no other Railway Minister has done. Lower fares and increase profitability.

Coming back to markets it was a seesaw ride and a volatile one at that. Sugar, Cement, Steel stocks saw some buying but it was the banks which were the big gainers. Reliance was volatile post the Friday announcement of promoters intending to increase stake on profit selling once the news was out.

Sensex closed up 17 points at 13649.52 helped up by gains in Guj Ambuja (127.55, ACC (945.9) Tata Motors (839.6, Grasim (2341.14) and Satyam (461.45) Restricting the gains were Bharti Tele (732.4,), RCVL (425.9,), BHEL (2258.75,), Ranbaxy (351.2,) and Wipro (614,).

Banks made a smart come back. They were part of our hunters pick. Clearly they have been on the receiving end. However, the RBI offered them a largesse post close on Friday. They would be eligible for some interest income retrospectively on the CRR balances and that will help the bottomlines. SBI closed up and so did PNB and other banks.

Sesa Goa was one of the winnders today. The talk is that the buyer countries have agreed to a price hike of of ore by about 10%. Companies having their own ore will certainly do well and Sesa gets the direct benefit.

Rayban was smashed. The Italian Partner has asked the company for No objection to start a 100% subsidiary for doing business in India. Its likely to have been bitten by the Sebi rule of takeover which has asked it to give an open offer when it acquired Rayban's sunglasses business globally. We are positive on the business but these developments have negative implications.
Technically Markets: Sensex is poised for a pullback which could happen upto 14030. Resistance will be found at 13710 and 13830. On the lower side 13440 seems to be a good support. Below which we could fall upto 13330 and 13040.