Market Close: Continues to look for direction !

Markets had a positive second consecutive day backed by strong value buying in Cement, Pharma, Airlines and Oil stocks. Markets opened on a strong note following positive global cues and falling crude prices. The Mid-Cap and the small caps also moved and helped the markets trade positive. Indices did slip in mid session but selective banking stocks especially the index major SBI rallied and helped indices back up in strong green. IT stocks traded weak on the back strong trade by Indian Rupee which touching an 18 month new high and was below 43.75 against the Dollar, the highest since Sept 2005.

Global markets were mixed with Asian closing up while European indices trading in red due to concerns over surprisingly high inflation in UK for February.

Sensex ended up by 61 points at 12705.94. It was helped up by gains in Ranbaxy (336.35,+6 percent), Rel Energy (476.15,+4 percent), Grasim (2124.1499,+4 percent), Guj Ambuja (110.9,+3 percent) and Hindalco (132.85,+3 percent). Restricting the gains were BHEL (2043.85,-2 percent), Infosys (2054.3999,-2 percent), TISCO (424.1,-1 percent), Wipro (573.3,-1 percent) and Hero Honda (635.3,-1 percent). It was a low volume day as well and that is not confidence driving still.

Ranbaxy rallied after it opted out of Round-II in the bid for Merck's generic business and cited stretched valuations for the same. Ranbaxy was the only Indian company in the race for Merck in Round-II after Dr Reddy's had officially pulled out of the race on similar grounds. Merck's acquisition at 15 times of EBITDA would not have been EPS accretive for Ranbaxy over the next four-five years. The stock surged by 7%. Expect some more here.

A leading business daily reported that the steel industry has asked the government to place a competitive restriction on iron ore exports at 90 MT for the current year in a move to conserve this key raw material required by the steel industry. The industry has also asked for a 15% reduction on the cap on iron export every year until the exports are brought to zero. India currently exports close to 100 MT of iron ore mostly to China. Restricting exports is a long-standing demand of the steel industry, which feels that iron ore needs to be preserved to meet the capacity expansion plans of the indigenous steel sector. In the budget the government has already tried to address the issue of iron ore exports by imposing export duty. However, when the steel industry reaches a capacity of 200 MTPA, it will require 350 MT of ore. Sail and Tisco traded weak. Both were slated for downtrades for today in our hunters pick. Do read that.

According to a leading business daily, the government has imposed a seven-months ban on new flights to and from Delhi and Mumbai. The ban would apply to any new flight that an airline wants to operate during the peak hours. The government has sought this measure in order to keep congestion at these airports at the bare minimum levels owing to the lack of infrastructure to handle the 'movement' along these airports. An aircraft 'movement' refers to the take-off or landing of a flight. The problem of congestion is also compounded by the fact that there is a shortage of trained air traffic controllers in the country. The ban will affect all the domestic airlines that had anticipated increasing their capacity on the Delhi-Mumbai route in anticipation of the forthcoming summer season. Less competition in the holiday season was seen as a positive and so also lower crude prices. Airline stocks were up with Jet up by 9%.

Technically Speaking: Yoyo trading for the day. Advances Declines ratio stood at 1:1. Today's Trading witnessed low volume at Rs. 2,841 cr. Resistance for the Sensex lies at 12,674, 12798 levels while the Support lies at 12,640 12,595 levels. Sensex has faced a major resistance at 12800. This will be a level to watch in the coming days. On the lower side supports are at 12650 and 12525.