Market Close : 16k conquered with aplomb !

It took 53 days for the journey from 15k to 16k for the Sensex. .The magical figure of 16k was crossed early in the morning as the indices zoomed like a rocket sparked by a rally across global markets. The US Fed slashed benchmark interest rates by half a percent. As the day started markets were on a rampage as major stocks cutting across sectors rose sharply for the day. The Reality stocks sang their way as the reality index moved up by almost 6%. But Sugar shares were stars as the Agriculture Minister Sharad Pawar said the government plans to give more fiscal incentives to sugar mills and that it would decide on monetary sugar sops in 8-10 days.

Tech stocks started positive but soon were the weaker of the lot. The Rupee attempted its highest levels in more than nine years after it rose by 0.7% to 40.20 per Dollar. The appreciating Rupee would put more pressure on the Tech stocks. The Banking and financial sectors saw action as they felt that the Fed move to cut the rates would put pressure on RBI to loosen its monetary policy. Buying was witnessed across the board with Auto, Banking, and Energy stocks leading the way. BSE Oil & Gas Index and the BSE Bank advanced by 5% and 4.8% respectively. Mid & Small caps also joined the rally with the frontline stocks.

Sensex ended the day up by 653 points at 16322 helped up by gains in HDFC (2367,+9 percent), HDFC Bk (1322,+7 percent), ONGC (899,+6 percent), Maruti (923.2,+5 percent) and Bharti Tele (874.5,+5 percent). There were no drags on the Sensex components.

Sugar was the story for the day. The sugar stocks rallied and most sugar stocks locked in upper circuit. This was on the back of the news that government will decide on monetary sops in 8-10 days. If this goes in line with the market expectations it would be a big positive for the sugar industry. There were other rules allowing them to manufacture Ethanol and that was seen as a profitable initiative. Integrated players like Shree Renuka Sugars and Balrampur Chini in particular would be benefited the most by the impending government move. And on the Ethanol blending issue sugar industry will need to increase ethanol production capacity by 40%. With this even the bigger market for ethanol will improve the sugar market. Currently a price of Rs 21.50 for ethanol translates to a price of Rs 14.50 for sugar. This is seen fairly attractive in the ethanol market. Requirement is for yet another 1 bn litre of ethanol production capacity for the current demand. Another report said that the sugar mills may be allowed to produce ethanol directly from cane juice instead of molasses to lower dependence on sugar prices. It was a sweet day.

DLF reported that the company plans to raise about $2 bn and list as a real estate investment trust in Singapore. The company also plans to enter the business of retail of luxury brands and is in talks with well-known retail chains including Georgio Armani, Versace and Dolce Gabbana. DLF may tie up with a foreign major for the supermarket business at a later stage. However, its first priority would be to partner with luxury brands. DLF is looking at franchising as well as joint ventures through the single brand FDI route. On real estate front the company continues to be in talks with international firms for investing in DLF projects. It had also tied up with Prudential for insurance, Hilton for hospitality segment, Nakheel group for SEZ's. This move is a part of the company's strategy to diversify its area of operations. All Reality stocks ended the day on a high note following DLF which ended the day up by 9%.

It was a rally of the Sensex stocks and the Index rallied. The current actions of the US and Europe will see their economies slow. Asia is seen as the haven for equities and the the rally reflects that. Asia is suddently becoming hot and thats the reason.

Technically Speaking: Sensex scaled up to 16000 levels and sustained above this levels. Indices made a high of 16335 and low of 16192. Whooping Turnover of Rs 7405 Cr for the the day. Sensex has done our target of 16100+ which we have been advocating for long. The rally is strong and 16600 is the next target for Sensex..