Market Close: ?Recession? clouds market !

Support from the retail investors was able to offset the impact of weak global cues in the initial sessions. However cautious was there in air which dragged the indices in the negative territory as the session progressed. Global jitters also had their role to play in the down ward journey. However, the small and mid caps continued out perform the index heavy weights. Technology counter slipped as Rupee appreciated to a 5 week high against the dollar. Worries in US continues and we dont think that thing will improve in near future. Higher crude also added to the existing worries on the bourses. Auto, Banking and Reality counters were some other counters to weigh on index. European indices were green.

Unconfirmed reports stated that the Chinese authorities in order to tame inflation (at present 6%) intend to hike the interest rates or open monthly sales. Some reports also stated that the Britain's biggest banks could be forced to cough up as much as £70bn over the next 10 days, as the credit crisis that has seized the global financial system sparks a fresh wave of chaos. Credit crisis now seems to be a global worry. Fed would meet on 18th Sep and everyone believes that interest rate would be cut this time. Let see if whether this provide some ease to markets.

Sensex was down by 54 points at 15542.77. Weighing on the Sensex were losses in Infosys (1823.2,-3 percent), Wipro (455.5,-2 percent), TCS (1023.85,-2 percent), Satyam (433.25,-2 percent) and Tata Motors (689.65,-2 percent). Losses were restricted by gains in NTPC (195.75,+2 percent), TISCO (708.7,+2 percent), HDFC (2148.05,+2 percent), Hindalco (157.1,+2 percent) and HLL (217.05,+1 percent).

ABG Shipyard is set to take over Western India Shipyard (WISL) for Rs 200 cr report papers. ABG will get management control of WISL and the 40% stake held by financial institutions led by ICICI Bank. It's a court initiated sale as WISL has more debt in its book. The current outstanding debt is Rs 280 cr. WISL is a one of the India's largest composite ship repairer at Goa. WISL revenues were placed at around Rs 53 cr. Assuming Rs 200 cr for the 40% stake valuations are placed at Rs 500 cr and also there is this extra 280 cr of debt giving an enterprise value of 780 cr. The ABG's Enterprise value to sales is 4.8:1. However WISL is a loss making company and hence utilisation levels would be low. ABG has an order book of Rs 5000 cr which probably could be handled better using the facilities; this acquisition helps ABG to with a foot into ship repairing business and that should be a good fit. The acquisition seems strategically good for ABG. But the acquisition price is something where data is lacking to give a fair comment. Meanwhile the uncertainty of the subsidy continues. However, WISL got locked in circuits higher by 5%.

Ceat is a part of RPG group and accounts for 31% of group revenues. RPG group is not a favored group known for its cross holdings and lack of transparency to smaller shareholders. The company has 12% market share in the Indian tyre market. It has revenues of Rs 1747.42 cr. Company derives 70% of its revenues form the car manufacturers the remaining is from the exports and the replacement. We expect the EBIDTA margins to go down in the coming quarters because of higher rubber prices and volatile crude. Our note should convince you why we feel other players are better placed in the industry as compared to ceat. Do read our note to know more. However, The stock closed higher by 3% for the day.

Technically Speaking: Sensex traded between an intra day high of 15,699 and low of 15,506. Advance and Declines ratio was 1:1. The volume for the day stood at Rs.4,935 cr. Sensex is facing resistance at 15700 but we believe it is just a matter of time before we cross it and move towards our target of 16100. On the lower side supports at 15490 and 15350.