Market Close: third day of upmove in low turnover !

Sensex had a nervous morning. As the sessions progressed cautious buyers were seen across sectors. Global cues did not hold out much as markets continued to waver between positive sentiment and negative. Indices traded ranged initially but then the direction was only one lead by banking. Banking stocks were on a roll in the last hour as renewed buying interest was seen after the government said the current cash squeeze in the system would ease in the next few days. Mid and Small caps did not do as well and the move was largely lead by index heavyweights. Most Asian markets closed in the green while the European indices were also trading in green.

Rupee hit a new high of Rs. 43.48 vs the Dollar. Everyone is waiting for the RBI to intervene. A strong rupee is good for the software firms. Volumes on the bourses have drastically dropped over the past few days, largely as the conviction is lacking. Volatility is expected to increase with expected expiry of derivatives next week.

For the first time in history, the government's net direct tax collections have crossed the figure of Rs 2,00,000 crore. Net direct tax collections were Rs 2,05,000 crore as reported on the Online Tax Accounting System. The net direct tax collections are expected to be Rs 2,25,000 crore till March 15 this fiscal. The final figure will be out in a couple of days after all the data are processed online. This is really good news.

Sensex closed up by 240 points at 12945.88. It was helped up by gains in ICICI Bk (870.35,+6 percent), HLL (190.75,+4 percent), Bharti Tele (761.75,+3 percent), Rel Energy (491.1,+3 percent) and SBI (982.15,+3 percent). Restricting the gains were Guj Ambuja (106.45,-4 percent), HDFC (1543.4,-1 percent), Ranbaxy (332.2,-1 percent), Grasim (2105.8,-1 percent).

Nestle India reported its results for the December quarter registering a growth of 18% YoY in its topline as compared to the same period last year. The company's bottomline however declined by 2.8% YoY excluding the extraordinary items. The fall in bottom line is a result of increased provisioning for contingencies that has been made for two years during the December quarter. For CY06, the company reported a growth in its topline of 24% YoY and a bottomline growth of 2% YoY. The topline has grown mainly on the back of increased volumes and price hikes during the year. Nestle India also said that the profits for the quarter and year ended December 2006 were adversely impacted by a steep increase in prices of commodities, higher operating costs associated with upgraded formulations and manufacturing processes of the infant nutrition products. The stock ended flat, while its peers Britannia (down 2%) and Tata Tea (down 1%) ended negative.

Telecoms counter were active post the regulating body TRAI slashed ADC (Access Deficit Charges) rates. ADC rates slashed to Rs. 2,000 cr from Rs. 3,200 cr by TRAI. The Amendment is to come in affect from April1. As a result of that per min ADC reduced to zero from Rs. 0.80 per min on al out going ILD (International Long Distance Calls) and Rs. 1 from Rs.1.60 per min on incoming ILD. The major gainers due to this amendment are Rcom, Tata Tele services, Bharati Airtel which closed higher.

Reliance Energy surged almost 3% on reports that the company was pursuing tie-ups with US companies. The company plans to get into the nuclear energy market. The Indo-US civil nuclear deal calls for massive investment as India can add up to 20,000 - 40,000 Mw of nuclear generation capacity, which Reliance Energy does not want to miss out on. Apart from nuclear energy, the company also came out with aggressive growth plans for wind energy. Besides this news there was also another reason for the surge as the company has reportedly bagged a contract for developing the Trichy - Dindigul National Highway four-laning project to be undertaken on a build-operate-transeferr (BOT) basis.

Technically Speaking: Markets traded weak in the initial sessions but bounced back later in the day. Sensex touched intraday high of 12964 and low of 12664. Market turnover was low at Rs 2716 cr. Overall breadth was in favor of Decliners, where the Advancers were 1154 to Decliners of 1391. Sensex has closed very near its resistance of 12970. If the sensex fails to cross above this in the recent rally then we might head back to 12300 and there is are crucial sessions ahead.