Market Close: A positive day..and Cement jumps

Market took a break from yesterdays weakness and started the day on a firm note backed by firm global cues. It was also helped by some buying activity in the index heavyweights. However Sensex couldn't sustain the firm start as investors preferred to book profits on high levels. Markets moved in a range bound but in the positive territory. The small volatility in the market was also due to the expiry of derivatives contracts for June 2007...the rollover to Nifty July 2007 derivatives stood at 48.29%. Buying in selective heavyweights helped the indices to notch some gains in the final hour after a much ranged sessions with Cement, Banks, Power and Pharma stocks lead the recovery. Engineering and Banking stocks were out of favor for the day.

Sensex ended up by 74 points at 14504.57. It was helped up by gains in ACC (898.9,+8 percent), Guj Ambuja (125.1,+7 percent), HDFC (1958.45,+5 percent), Grasim (2623.5,+5 percent) and BHEL (1488.85,+2 percent). Restricting the gains were Bajaj Auto (2094.05,-2 percent), ONGC (906.35,-2 percent), Cipla (203.05,-1 percent), Tata Motors (664.95,-1 percent) and RCVL (510.2,-1 percent).

Cement sector was the king today. We had indicated in our hunters pick that this was likely to be the case. Most of the scripts rallied on renewed buying after the Finance Minister P Chidambaram announced that there was no freeze on cement price and the government has not tried to control cement prices. He also said that the prices had gone up by a few rupees in south India. India Cement closed up by 10.62% and was also the top gainer, ACC spurted 8.33% while Ambuja Cements was up by 7.43%. We had a wow call on India Cement. We booked profits in that with close to 20% gains.

We had a research note on Austin yesterday and the stock closed up 20%. Thats the power of research. This is a bearings company whose results were good. It is less followed and hence valuations remain low. The demand scenario is robust and this company has strong skill sets. We had a research note on Nestle as well... This has no immediate upside triggers but seems to be an interesting play. Do read that. We also reran a recent note on Eastern Silk Industries. The stock closed up circuit. There was another stock stuck up and that was Numeric Power.

HCL Tech reported that it has opened a delivery centre in Krakow, Poland. This is HCL's second European outsourcing facility after the success of its delivery centre in Northern Ireland, which now employs 2,300 workers. The Poland delivery centre will now have 100 local employees which will grow to 250 by the end of the year. The new centre would particular focus on application development and infrastructure services. The company has signed some of Europe's biggest infrastructure outsourcing deals that take advantage of the excellence in IT and engineering skills in India. Setting up delivery centers in Europe will enable the company to provide customers with resource and expertise combined with Indian service innovation, such as value-based pricing. Do check the research note on the company that we have on our web site. The stock ended marginally higher.

Technical Speaking: Markets traded ranged on F&O expired today. Sensex touched an intraday high of 14537 levels and low of 14435 levels. Volumes were good as the market churned almost Rs. 4682cr. Overall breadth was in favor of Advances, where the Advancers were 1482 against 1164 Decliners 1164. Sensex is holding above the support level of 14400--14420. Sensex has been ranged between 14400 and 14560 for some time. This is a very narrow range and we are most likely to make a break on either side soon. The trend is still up and the break is most likely to come on the higher side (at 14560). Avoid longs if market holds below 14400 continuously for 2 days.