Close: Bounce back on global cues !

Markets started off strong at the start of the trading session on the back of a strongly positive Asia and the fact that investors felt that the selling had been overdone. However it was a volartile session as Sensex gave up almost all of its 300 points gain by mid day only to see value buying in the later part of the session. 'Volatile' is how one would describe the markets. Buying was witnessed in the IT counters on talks that the Fringe Benefit Tax on ESOP's could be done away with. The chances of removal are not very strong taking into consideration the reason for which it was implemented by the Finance Minister in the recent union Budget though the size of this tax could be a small one where information is yet awaited. Buying was also seen in mid caps along with Cement stocks at lower levels. It was on the global front that the performance was extremely supportive as the Asian Indices ended in dreen and the European ones too saw strength right from the word go.

Ashok Leyland was also in demand after its sales numbers. There were talks that it was a likely winner for Punjab Tractor Ltd. The Stock ended up by 5%. Jet continued to trade at higher prices to end up by 3% after there was a change in Govt Policy regarding Air Port charges. The change in the policy gave full Service Providers like Jet a competitive against Low cost airlines that were giving them tough competition from the pricing point of view.

Sensex closed up by 282 points to end at 12697.09. It was helped up by gains in Wipro (580.75,+8 percent), Infosys (2116.3,+5 percent), ACC (854.4,+5 percent), Satyam (433.95,+5 percent) and Bharti Tele (718.45,+4 percent). Restricting the gains were Hindalco (130.1,-3 percent), NTPC (133.1,-3 percent), Hero Honda (666.85,-3 percent), Tata Motors (726.3,-1 percent) and HLL (171.4,-1 percent).

Bharat Petroleum Corporation Ltd (BPCL) ended up by 5% after it announced its plans to start an oil-trading arm in Singapore, in an effort to become a price maker and to capture export markets as it boosts refining capacity. Currently, the Indian refining capacity of 135 m metric tonne (MMT) is outstripping domestic demand by around 20-25 MMT, thus leading to increasing exports by Indian companies.

There was not much impact on Indian Oil Corporatrion (IOC) after there was a fire reported in its refinery in Assam. Refinery which has the capacity to process 20,000 barrels of crude per day is expected to be shut for 3-4 days. More information on this issue is expected from the company by late Tuesday. Despite that Stock was up by almost a percent for the day. All the oil refiners were helped by the fact that crude slipped from $ 62 / barrel levels to under $ 60 / barrel. We continue to avoid these politically sensitive stocks.

Technically Speaking: Decline outnumbered the Advances for the day as there were 1465 declines against 1105 advances. Trading session generated a volume of Rs. 3,807 cr. Resistance for the day ranged between 12858-12976 levels while support was at 12525-12309 levels. Sensex has closed at day high. We might open higher tomorrow, which could again attract selling. Need to watch the levels of 12840 and 13250 on the higher side, whereas 12450 and 12300 are key levels as supports.