Market Close: Global worries weigh on markets !

Weak sentiments in global markets weighed heavy on the domestic markets as from the word go the Sensex kept on falling as the day progressed. The high positions in the FNO segment ahead of the expiry tomorrow also played its part on the market. As the sessions continued, buying was seen across a few sectors but there was caution. A bit of recovery was seen in the mid session. Indices witnessed heavy selling pressure which kept markets in red. Today was the last day of trading for the current financial year 2006-07. Trades executed from tomorrow will be considered for the financial year 2008. Selling pressure was not just restricted to index heavyweights but also the Mid and Small caps were not spared too. Excluding selective Media, Power, Sugar, Pharma and Cement stocks, selling pressure was witnessed across the board. All Asian indices closed in the red except Shanghai Composite which was up by 1%. European indices also did not leave much scope for positive.

IT stocks were the worst hit, as the Dollar fell below Rs 43.15 versus the Rupee, its lowest since June 1999. Also to add to this was the weak consumer confidence report with brought in concerns about a slowdown in the US Economy where these companies generate their maximum revenue. The report has compounded the woes of Indian IT companies just after the new found strength of the Rupee. However we expect the RBI to intervene.

As per some reports, Asian economies grew by 8.3% in 2006, the fastest since 1995. China and India accounted for about 70% of this expansion. Indian economy notched up a GDP growth rate of 9.2% in 2006 but things will cool down a bit in 2007. China too is expected to see a slowdown in GDP growth rate, from a blistering 10.7% in 2006. Reports said that the growth would slow down to 10% in 2007 and further to 9.8% in 2008.

Sensex closed down by 240 points at 12884.34. Weighing on the Sensex were losses in TCS (1201,-5 percent), Wipro (558.2,-5 percent), Tata Motors (718.8,-5 percent), SBI (974.2,-4 percent) and Satyam (455.6,-4 percent). Losses were restricted by gains in Ranbaxy (338.2,+3 percent), Dr Reddys (693.9,+2 percent), ONGC (866.3,+2 percent), Rel Energy (482.35,+1 percent) and BHEL (2281.45,+1 percent).

Satyam Computers has signed an estimated $200 million (around Rs 900 crore) five-year contract with California based Applied Materials Inc, a global leader in microchips that serves the electronics industry. Satyam will provide application development, maintenance, and support (ADMS) besides business transformation core technology services to Applied Materials through a managed services delivery model. Satyam has provided ADMS and engineering services to Applied Materials for more than five years prior to this announcement. Last year, Satyam has signed a $71 million 7-year contract with Australian airline Quantas and a $30 million 10-year contract with the Punjab and Sind Bank. The big orders are flowing. The stock had been strong for the past couple of days but the stock succumbed to profit taking. on the back of a depreciating dollar. The stock closed down by almost 3%.

IOC is planning a major expansion in Turkey which includes setting up a US$ 6 bn greenfield refinery, acquiring a majority stake in an existing petrochemical company and entering into fuel retailing. The overseas plan is part of the company's five-year expansion strategy with an investment of around Rs 430 bn. IOC will hold 51% equity stake in the 15 million tonne refinery project and may rope in Calik Energy as a partner for the same. The refinery is expected to be built by 2012 and it would export products to the US and European markets. The stock closed weak (3% lower), along with its peers HPCL (down 4%) and BPCL (down 3%).

TCS and Tata International which together hold 50% stake in the BPO joint venture with US based Sitel Corporation are exiting the six-year-old joint venture by selling their stake for US$ 22.2 m to Sitel Corporation. The decision to exit Sitel India is part of the Tata group's strategy to consolidate all BPO operations under TCS. TCS has also entered into a multi million Dollar agreement with GlaxoSmithKline (GSK) Plc to establish a global drug development support centre in Mumbai to help meet the demands of the growing GSK pipeline. The stock closed down by almost 5%.

Technically Speaking: Markets traded weak as Sensex touched intraday high of 13035 and low of 12861. Market turnover was decent at Rs 4008 cr. Overall breadth was in favor of Decliners, where the Advancers were 660 to Decliners of 1949. Sensex closed below its crucial support of 12900 and Nifty Futures also indicated some negatives for tomorrow as it closed below 3770 levels. Further support for Sensex lies at 12800 and 12650 levels.