Market Close: Lacklustured session..

Mixed global cues kept Indian Indices in a volatile mood. Market saw firm start but then it saw series of wild swings through out the day. Profit booking at high kept market negatively biased. Lack of positive cues kept investors cautious to enter the market. As the day progressed markets lost further and entered the red zone. Some attempts were made to recover the losses in the final hour but pressure was maintained and the indices finally ended the day in the negative territory. Selling pressure was witnessed across the board but few selective Pharma, Cement and Software stocks were in favor. Some action was seen in the Mid and Small caps as they ended the day marginally up in green.

Sensex ended the day down by 5 points at 15459.93. Weighing on the Sensex were losses in Maruti (2%), Ranbaxy (2%), ACC (2%), Bharti Tele (1%) and SBI (1%). Losses were restricted by gains in Cipla (2%), Ambuja (2%), NTPC (1.5%), Wipro (1.5%) and ICICI Bk (1.5%).

We believe that we are entering a consolidation phase. Sensex has multiplied 5 times in the last 4 years and so consolidation will not happen in a matter of weeks. It could be months. With the uncertainties looming ahead we believe that the upsides will be limited hereon. Technically though there are many who would debate our view.. but that is what makes the market.

As per reports, Property developer Akruti Nirman has tied-up with Limitless, a subsidiary of Dubai World to bid for the project for redevelopment of Asia's largest slum, Dharavi. There are 78 companies (25 international) in the race to bid for this Rs 9,250 cr Dharavi Redevelopment Project. The project will include replacing 57,000 slum structures spread over 500 acres (divided into five sectors of about 1.5 crore square feet each on an average). DLF, HDIL, Hiranandani group, Emaar-MGF combine, Sobha Developers and also the Ambani brothers separately are the major players here. The talks on this have been on from long time but no positive outcome has come till now. The process of selecting bidders may see some delay. Akruti flared up just on tie up news bidding is yet to be done. Really difficult to coment here.

The Reliance Group is planning to foray into footwear business. It will be sourcing footwear from exporters for its retail business. Reliance Retail is targeting business worth Rs 3000 cr in footwear by 2010-11. Of the targeted Rs 3000 cr the group expects Rs 1700 cr from supermarkets and hypermarkets and Rs 1250 cr from specialty stores, and Rs 50 cr from its Reliance Fresh chain. It expects footwear to comprise 3% of its total sales over the next 4-5 years and is expected to source 50 million pairs of footwear annually over the next 4-5 years. Reliance Retail has short listed 30 exporters for footwear sourcing. We had been waiting for the trigger which we believe will put pressure on the unorganised sector. Impact of the lesser footfalls are already being felt by the local shops. The Malls are taking away sales. If the large hyper markets start selling shoes, it will really lead to consolidation for the sector. This in a way is good for Bata and Liberty, which are the best brands in the category. Their sales growth has been limited by the Mom and Pop stores which really faced little pressure as their suppliers.. which too are the unorganised were out of the tax net. Crew Bos and Mirza Tanner are the other small palyers. We have covered Liberty and Bata in our research...Do read for more details.

Zinc fell to below $ 3000 per tonne and with metal charts are not showing the strength..the direction seems down. Eveready benifits from the low zinc prices. The company is also asset stripping. It sold its land as indicated in our previous heard and read. There is more property on the books and more than justifies the price. The Management meets tomorrow for a preferential issue to Promoter group. Interesting to note that the company hadissued about 67 lac warrants for Rs 95 and converted 9.4 lac warrants at that price. For the balance it had to pay 10% upfront. With the stock falling to half of that levels the promoters are probably using this opportunity to average out now that the future looks promising. The Uttaranchal plant has started and ramp up happening. Really.. we believe that this time around the upsides may be more sustainable. Ofcourse near term jump by Zinc could spoil the party.

Technically Speaking: Ranged and choppy session continued for the second day. Sensex made intraday high of 15581 and days low of 15407. Advances Declines ratio stood at 1:1. Sensex churned a Turnover of Rs 5146 Cr. Sensex failed to cross over the Resistance of 15570 which could be a temporary correction. On the lower side 15300 seems to be a good support. We expect the Sensex to do 15650 and if closes above that it might go on to make a new high of 16100.