Market Close: Nifty crosses 5K.. Now what ?

Just 6 sessions and the journey from 16K to 17K was completed yesterday. It was also the fastest 1K run the market had seen till now. Today was also a historical day as the Nifty passed its 5K in the early sessions after almost 10 months it passed the 4K mark. The indices zoomed up in the early sessions sparked by a rally across global markets. As the day progressed indices lost some of its early gains by mid sessions as investors booked profits at high levels. Indices traded in a ranged manner for most of the time but surged at the end to touch new all time high. Also the short covering ahead of September 2007 F&O expiry helped the market close at all time high.

Most of the sectoral indices edged higher on renewed buying interest shown by the investors. Metals and IT sectors lead the way as they ended up above 3%. IT sector suddenly saw some buying even though rupee traded at 39.71 against Dollar. Appreciating Rupee would put more pressure on the Tech stocks as almost 50% of revenues are from US. The rally was seen due to central bank's recent measures to tame the appreciating rupee as it relaxed overseas investment by local companies, mutual funds and individuals. Small and Mid caps also ended in green along with its front liners. Today US would release economic data. All depends on how the numbers come and importantly how will the market react to it.

Sensex ended the day up by 229 points at 17150.561. It was helped up by gains in Rel Energy (1117.25,+9 percent), TISCO (794.6,+6 percent), Infosys (1911.75,+5 percent), HDFC Bk (1433.3,+4 percent) and ONGC (971.65,+4 percent). Restricting the gains were HLL (218.8,-3 percent), Guj Ambuja (145.15,-2 percent), RCVL (582.8,-1 percent), Hindalco (164.1,-1 percent) and Grasim (3426.95,-1 percent).

Kewal Kiran Clothing Ltd (KKCL) was in the limelight for the day on the back that it is likely to acquire a mid size apparel brand. According to sources the company plans to acquire a brand in the kids wear segment where it has no presence yet. The acquisition would be funded through a combination of internal accruals and debt and if required, equity placement. The company is also looking to add a design house or become an exclusive licensee of an international brand. News are making rounds that it is also looking at forging a joint venture with a foreign player to get its brand in the country. At present KKCL earns 5 % of its total revenue from exports. Its K-Lounge setup contributes 20 % and the flagship denim brand Killer brings in about 50 %. The company has introduced three men's apparel brands focused on different age groups in the last few years. Company is expanding its exclusive K-Lounge stores to 143 by the end of December from 74 stores currently. Currently, around 53 % of the company's retail outlets are concentrated in the western region. Following the expansion the West would have 36 % of the outlets, while North would have 32 %, South (22 %) and East (11 %). The stock rallied and ended up by 5%. Do read the note on our site for a better view on the company.

Educomp Solutions, India's largest education company by market value, was rated 'sell' by Citigroup with target of Rs 2,380. The market reacted to it and the stock ended down by 4.7%. The educational business is seen the best sector with government also spending high for educating the people. The approved outlay for education in the 10th Plan is around Rs. 30,000 crores while for secondary education and higher (including vocational training is Rs. 13825 crores. The Government of India has spent over Rs.10,000 crores (USD 2.2 billion) on Elementary Education in the country during 2005-06 and around Rs 2563 crores on Higher/Secondary Education. Education in the country is funded through a 2% Education Cess and other Budgetary Allocations. Some companies have been shifting its focus on education. Core Projects and Technologies, an IT services company has shifted its focus to education services through the inorganic route. Educomp being foremost and only listed company was pampered by the investors. But now competition has started building.. Everonn, Navneet and now Core projects would be giving some tough competition to Educomp. Core projects at Rs 196 is valued at nearly 22 times estimated FY08 earnings while Educomp and Everonn trade at over 85 times estimated FY08 earnings. Do read the detailed note on Educomp, Everonn and Navneet. Note on Core Projects will follow soon..

Technically Speaking: Market zoomed in early session however was ranged for the whole day due to expiry of derivatives. Sensex touched intraday high of 17188 and low of 17108. Overall breadth was in favor of Declines. Declines stood at 1458 while Advances at 1286. High volumes have been noticed over last 4 days. Today also the market churned Rs 7727 crores. It was FNO expiry and the psychological level of 5000 was crossed for the Nifty as well. The rise in the Sensex was 162% of the fall which took place between 24th July and 17th August. Expect markets to take a breather before any further direction can be taken.