Market Close: Eased political issue helped !

Mixed global cues and political uncertainty kept Indian Indices in a volatile mood. Despite a strong start indices witnessed a roller coaster ride as selling intensified in the mid sessions. Investors were cautious to enter the volatile market but buying at low levels in the front liners gave a boost to their sentiments. Late in mid sessions market saw some recovery after the news that Congress has settled issue with the Left. Buying was seen across the board with capital goods, power and metal stocks leading the pack of gainers. The BSE Capital Goods and the BSE FMCG advanced by 4% and 3% respectively. But some Realty, Banking and selective Auto stocks were out of favour. Midcaps also saw some action.

Sensex ended up by 260 points at 14248.66. It was helped up by gains in BHEL (1666.95,+5 percent), Rel Energy (724.8,+5 percent), TISCO (569.3,+4 percent), Bharti Tele (847.65,+4 percent) and ITC (158.4,+4 percent). Restricting the gains were Tata Motors (618.95,-2 percent), Cipla (175.55,-1 percent), Hero Honda (625.85,-1 percent), SBI (1457.95,0 percent) and Maruti (766.7,0 percent).

We met with IT People which is expected with its follow on Public offer. The company provides human capital solutions on the IT and ITES industry globally. The company addresses vital requirements of the IT industry by providing recruitment Solutions through an e-Recruitment portal. The Company has a large active database of CVs, in addition to online services. IT People have a complementary 'brick and mortar' model for providing a range of contract consulting services that meet client's off-line requirements. The Company's client list includes Emirates Airlines, National Bank of Dubai, EDS, KPMG, WIPRO, Hexaware among others. For FY 07 the revenues were seen at Rs.18 crores and Net Profit of Rs.3. crores. With a Market cap of 185 crores it seems pointless to talk about it. The company is a play on the high attrition in the IT sector. The company hopes to raise Rs 45 cr to use for promotion and for setting up new offices.

A new policy is on cards to bring about state-of-the-art technology in wagon manufacturing, maintenance and allow private players to procure wagons on lease without investing in it. The existing wagons were designed 25 years ago. They have become outdated and there is a need to change it to meet the global standard. Currently, customers have to buy their own wagons for carrying goods under the wagon investment scheme. The policy would allow private players to invest in special kinds of wagons and lease them to customers of railways. Till now, it was only railways which could lease out wagons. Certainly there is immense demand and supply is constrained. Titagarh Industries has indirect exposure as part of the group of Titagard wagons. It supplies castings here. A direct exposure is Texmaco which is a story by itself. Increasing capacity in its foundry will make this a strong play. However, on valuation parameters, things don't seem too encouraging. Expect a research note on this one. Texmaco ended down marginally.

Telecom was mixed for the day but this sector may see pressure. The TRAI has suggested 'number portability' as the solution to ensure that the Telecom companies don't increase prices as they recently did. The suggestion is also to have no limit to the number of players in each circle. This is the risk we have been referring to earlier. The companies would need to invest big way to give better services and the returns may not be commensurate. Look for negatives in the Telecom stocks if this comes in.

Technically Speaking: Sensex had volatile session with no clear direction bur recovered in late trading hours. The Declines outnumbered Advances as the declines were 1568 against advances of 1122. Volume for the day was at Rs.4387 cr. Sensex closes near the 200dma with major resistance seen at 14400 levels. Many pivotal are at their resistance so the market can see some more choppy sessions. If the market breaks the 14400 levels then the market can see some directions.