Close: Markets trying to price in the political uncertainty !

The tussle between the Congress and the Left parties regarding the Nuclear issue continued to weigh on the indices for second consecutive trading session. Lack of support from the Global front resulted in a clearly down market. There were simply no buyers. Central Bank of India listed today at a premium was some solace. SEL Manufacturing also made its debut on the market at a discount was able to end the day in positive. The worries from of Subprime mortgages on the business of Technology stocks had them badly mauled. The major losers for the day were the Technology, Banking, Auto and reality counters. Small and mid caps were also got hammered in the downward rally. European indices continued to trade in the negative territory after a start in red.

Sensex closed down by 438 points at 13989.11. Weighing on the Sensex were the losses in SBI (1463.75,-6 percent), Wipro (446.8,-5 percent), ICICI Bk (830.3,-5 percent), RCVL (483.8,-5 percent) and Rel Energy (692,-5 percent).

Reliance Ind (RIL) closed lower 2% despite discovering Gas in the D-4 block (KG-DWN-98-1) in the Krishna basin. Papers reported another oil find for RIL and in another block which is fully owned. As per reports RIL has submitted part of the information available after MDT and sought a 6-month extension to continue drilling at D4. RIL had to relinquish the block by September-end, if it failed to strike oil or gas. The minister's panel is expected to meet on August 27 regarding the Gas pricing issue. The court case between RNRL and RIL regarding the share of Gas from the D-6 block is also due day after tomorrow.

Sale of Land by Kilburn Engineering (KEL) failed to attract buyers. Kilburn Engineering closed lower by 13%. KEL a unit of Williamson Magor which has a factory on the Bhandup land, agreed to sell its 8.32 acres of land to the Sarang Wadhawan-led HDIL for Rs 125 cr. The total debt in the books is around Rs 15 cr. Net of debt, value per share comes to Rs 81. There is more than meets the eye.

The US-based Blackstone Group intends to acquire 50.1% stake in Gokaldas Exports at Rs 275 per share. Blackstone will also make an open offer for 20% shares, as per the Sebi guidelines, at Rs 275 per share. The total cost of the acquisition including the public offer will come to Rs 682 Crore. Gokaldas derives 83% of its revenues from exports. The top line of the company was under pressure on account of slow down in apparel spending in US from where it got the maximum orders. Stock closed higher by 10%. We have not been positive on Gokaldas given the cost plus business model. We prefer Zodiac.

Technically Speaking: Sensex traded nearly 600 points between day high and low. Declines outnumbered Advances in the ratio of 4:1. Volume for the day was at Rs.4,201 cr. Sensex closes near the 200dma, but most likely to go down further upto 13500. Any pullback rally is likely to get sold off near 14325.