Market Close: some profit taking in lacklustre trades

Jittery investors sentiments saw profit booking in the indicies after a very strong week where Sensex made the highest gains ever. There markets were lacklustre ahead of the Investors were also in a holiday mood as well as cautious ahead of F&O expiry. Market lost its ground in mid-day trade under selling pressure across index heavyweights which continued to slip southwards. Adding to this fall was the weakness in Dollar as the Rupee surged to a 20-month high. High crude oil prices also weighed on the bourses. Selling pressure was witnessed in selective stocks of Auto, Software and Airlines, while Cement and Telecom sector were in investors favour. Asian Markets managed to trade in green before closing, while Europe trading in mixed.

Sensex closed down by 162 points at 13124.32. Weighing on the Sensex were losses in Tata Motors (753.85,-5 percent), HDFC Bk (982,-3 percent), Wipro (584.8,-3 percent), Maruti (818.9,-2 percent) and TCS (1261.25,-2 percent). Losses were restricted by gains in Satyam (472.25,+2 percent), ONGC (853.2,+1 percent), TISCO (441.9,+1 percent), RCVL (426.3,+0 percent). Volumes were low as they were expected to be. However FNO expiry for March and the year end date accounting may bring in high volumes for the rest of he week.

Glenmark Pharmaceuticals inched a deal to buy more than 90% of the Czech firm Medicamenta. Glenmark joins bigger Indian rivals such as Dr. Reddy's and Ranbaxy in trying to expand into Europe's growing generics market. This acquisition provides Glenmark with a strategic entry point into two of the fastest-growing and attractive markets in Europe. Glenmark also expects Medicamenta to provide a base for its branded products in Europe and will also look to develop and expand Medicamenta's current portfolio. Medicamenta, with marketing operations in Czech Republic and Slovakia is expecting its revenues to touch US$ 8 m in 2007. Pharma sector traded firm with Glenmark Pharma (up 6%) and Pfizer (up 4%) being the key gainers.

Sugar sector was back in demand today on government's decision to give incentives to companies that export the sweetener giving some cushion. The government would give a subsidy of as much as Rs 1,450 a tonne to sugar exporters while an incentive of Rs 440 a tonne will be provided on the export of raw sugar and will also consider creating buffer stocks of 20 lakh tonnes for two years in view of the high production of 250 lakh tonnes estimated this year. Market observed the incentives offer and expected to give a boost to sugar sector and the subsidy will provide a cushion to sugar makers. Bajaj Hindustan, Balrampur Chini closed up by 4%, while Sakthi sugars and Renuka sugars were the other major gainers.

Imported liquor might see scrapping of additional customs duty on wines and spirits. Currently there is a basic customs duty of 100-150 per cent and an additional customs duty (ACD) of 25-150 per cent on wines and spirits. The total incidence of tax is between 250-550 per cent depending on the import price of products. If the bill is passed then the imported liquor will be really cheap that will slow down smuggling. Though this is negative prima facie for United Sprits, and Radico Khaitain but the Indian system of distribution within states is so controlled that benefits of this will only accrue to existing players given that they understand the system. The foreign brands in any case dont have such a mass following we believe. However even Champagne could do the imports and benefit from the same though really it could slow the growth of its own brands which is key. There was little action here though.

Technically Speaking: It was a volatile morning but Sensex then after making an intraday high of 13330 kept its nose pointed downwards. Sensex is in a correction mode, after a big spurt last week. Supports were seen at 12950 and 12905 and Resistance at 13286- 13428 levels. Key positive would be with Sensex breaking out of 13520 levels. With the Derivatives expiry nearing in, markets likely to see some volatility before it can break above those levels. Market turnover stood at Rs 3126 cr. Market breadth was in favor of Decliners as; Advances were 849 against Decliners of 1746.