Market Close : Volatility on upper hand ahead of F&O settlement

Global markets where weak and no surprise that Indian market opened subdued on back of this. Investors continued to be cautious ahead of F&O settlement which kept the indices volatile. Indices continued to trade in the positive territory in the preceding sessions. However, profit booking in the final trading hours resulted flat close. The buying activity was witnessed across Auto, Cement and Engineering counters. Power and Banking counters were on the sellers hit list. With crude almost at $ 69 a barrel refineries were under pressure. European markets were weak too.

Sensex closed higher by 13 points at 14501.08. It was helped up by gains in ONGC (935.9,+2 percent), Bharti Tele (850,+2 percent), Grasim (2496.1499,+1 percent), BHEL (1470.75,+1 percent) and Tata Motors (684.4,+1 percent). Restricting the gains were Ranbaxy (347.65,-2 percent), Wipro (508.65,-1 percent), ACC (846.1,-1 percent), HDFC (1884.85,-1 percent) and Guj Ambuja (116.1,-1 percent).

Jet ended 2% higher post results. Company posted a net profit of Rs 88.01 cr for the quarter compared to Rs.227.12 cr, down by 61%. The top line for the quarter stood at Rs.1,989 cr against Rs.1,950 cr, marginally higher by 2%. On yearly basis the top line improved by 21% at Rs.7,401.31 against Rs.6,087.57 cr. Company informed that its recent acquisition of Sahara Airline which would be renamed as Jet Lite is expected to break even by the October this year. Company intends to make Jet Lite a low cost carrier. With consolidation among the existing Airline companies expect the losses suffered by the industry to slow down. Post consolidation the three big companies (Air India & Indian Airlines) (Deccan airways & Kingfisher) (Jet & Sahara) account for 80% of the total market. This will have a significant impact on the airfare prices in the country. Things are changing here but we would prefer the wait and watch.

Suzlon energy ended 5% higher after the company got technical clearance from the Kerala state Govt for setting up wind mils in Attapadi. Company had applied for setting up 33 wind mills aimed at generating 20 MW of power, Anert (Agency for non conventional energy sources) which is the nodal agency for wind power development has currently accorded technical clearance for setting up eight machines in Sholayur village which will generate 4.8 MW of power. The setting up of 33 machines will involve an outlay of Rs 1.1 cr and the first 16 machines will be commissioned by September 2007. Company has already purchased 500 acres of land in Attapadi for setting up wind farms totalling 100 mw of power. With exhausting resources and global warming shift to renewable and natural enery will increase. We are positive on the company.

Esab India which has an open offer from its parent Charter Plc as the company wants to increase stake by 20% to 57.5% and this at Rs 436. The stock remained bouyant throughout the day but ended lower by 2%. Do read our research to find out why we remain positive on the company.

Technically Speaking : Sensex is trading in a very narrow range for the last 4days, and we are very near the expiry. Bears likely to have a upper hand in the expiry days if the support of 14,420 is broken. On the higher side the Sensex has made a double top in the last 4 days at 14560, which creates some skepticism. Yet the trend seems positive unless 14,420 is broken and we are likely to have a bullish expiry. The volume for the day stood at Rs.4,677 cr.