Close: Fourth largest gain in single day !

Indian indices made an not so expected sharp recovery today. Sensex gained 500 points, which is the fourth largest single day gain in its history so far and the largest gain since 15th June 2006. The initial hour of trade saw a choppy session with value buying across the board, for through out the day. Value buying was seen in index heavy weights, small caps, mid caps and all the sectors like Metals, Banks, Cement, Automobile and Software. Asian indices ended in strong while European indices currently trading in green.

Sensex closed up 470 points at 13049.35 helped up by gains in HLL (183.8,+10 percent), Guj Ambuja (112.9,+8 percent), BHEL (2175.45,+8 percent), Dr Reddys (677,+7 percent) and Ranbaxy (328.8,+6 percent). Interesting to note that there were no Sensex components in the negative.

FIIs have stopped being sellers and thats some relief. FIIs have been the sentiment drivers. This turnaround has brought in some buying on hopes that there is now value available. However having said that its important to note that we are not out of the woods. The bogey of inflation still stands overhead and the valuations for many still remain a bit wanting. More than that its sentiment which has been hurt and that really will take time to heal. Expect Markets to be quite volatile.

Century was the star for the day and it was part of the hunters pick. Gujarat Ambuja sold 2 acres of a plot of land in Kalina.. a suburb of Mumbai for Rs 333 cr. Century holds 30 acres of land in the heart of the city of which roughly of 10 acres, was taken on lease from Bombay Dyeing on a 999-year lease and can be extended for another 999 years apart from Century Bhavan at mid-town Worli. This in similar benchmark accounts for Rs 500 per share. The stock made a smart 14% gain for the day.

With China expected to cut steel production Steel stocks were stars as well. Sail saw gains of over 15% as well. All part of hunters pick.

PSU stocks traded firm for the day. Indian Oil Corporation plans to invest about Rs 25,000 cr for setting up a new 15 mn tonnes refinery and petrochemicals complex at Ennore in Tamil Nadu to maintain its position as India's largest refiner. IOC plans to build the 15 mn tonnes refinery at Ennore, mainly catering to the export market. The 15 mn tonnes Paradip refinery is scheduled for commissioning in 2011 and our Ennore refinery will come up sometime in 2015-16. The refinery-cum-petrochemicals complex would be set up in joint venture with Chennai Petroleum Corp Ltd, an IOC arm. IOC wants to set up a naphtha cracker and aromatics complex at Ennore to utilise the products from the refinery. IOC has a total refining capacity of 60 mn tonnes, which it plans to increase to 80 mn tonnes by 2012 while pushing up revenues to $60 billion (Rs 270000 cr). IOC closed marginally up for the day and its peer BPCL and HPCL closed marginally up as well.

Pharma stocks traded in green for the day. India's largest pharmaceutical company, Ranbaxy, has been taken to court in the US by a consumer health group, which supports the sale of low-priced generic medicines. The organisation has filed a suit against Ranbaxy and three other generic companies - Mylan, Teva and Barr as well as Cephalon Inc for allegedly delaying the US launch of 'Modafinil', the generic version of Cephalon's sleep disorder drug 'Provigil'. Indian companies like Ranbaxy have been fighting long and expensive battles with MNC pharmaceutical companies to enter the generics market in the West. In this, they have received support from groups that work for bringing down the cost of drugs. However, the suit against Ranbaxy alleges that Cephalon paid US$ 136 mn (Rs 612 cr) to Ranbaxy, Mylan, Teva and Barr to postpone marketing 'Modafinil' until 2011 or 2012, thereby blocking the availability of a cheap generic medicine. The US FDA had tentatively approved Ranbaxy's abbreviated new drug application (ANDA) for 'Modafinil' 100 mg and 200 mg tablets in August 2004. Cephalon, after initiating legal proceedings against the generic companies that had got the US FDA's nod, chose to settle the patent litigation out of court in December 2005. Ranbaxy closed up by 5% and its peers Dr. Reddy's and Nicholas Piramal closed up by 5% and 7% as well.

Technically Speaking: It was a bullish session for the whole day before closing. Sensex touched intraday high of 13099 and low of 12596. Sensex has started its journey up to fill the gap it left open between 13300 and 13440. Resistance at 13260, 13310 and 13400. Support at 12900, 12590 and 12390. Market turnover stood at Rs 3599 cr. Overall breadth was in favor of Advancers where the Advancers to Decliners ratio stood at 2.3:1.