Market Close: Smart recovery..but !

The initial sessions saw a yoyo movement on both positive as well as the negative zone. However, the momentum gained on the back of support from the investors as the session progressed. All eyes are on the out come of the Fed meet scheduled today. The probability of 25bps rate cut is quite strong and markets seems to have discounted that. Small and mid caps continued to attract the investors. Banking, Metals, Consumer Durables, Reality and Oil marketing counters were the gainers for the day. Appreciating rupee and sub prime worries continue to weigh on Technology counter. European indices continued to gain strength after a start in green.

Credit worries in England indicate that condition has worsened...but we would rather say that it is more of confidence crises. Rate cut is for sure ! However on crude prices above $81 again puts Fed between hard and rock. High crude prices will probably lead to inflation. At the same time interest rate cut is the best possible solution for credit worries. Tough one! Let?s see how Fed figures out this.

Sensex closed higher by 165 points. Weighing on were the losses in Cipla (-2.04%), Wipro (-1.04%), ITC (-0.50%) and Dr. Reddy?s (-0.28%). Losses were restricted by gains in ICICI Bank (+2.86%), SBI (+2.82%), Bharti Airtel (+2.06%) and Reliance Energy (+1.80%).

Transport Corporation of India (TCI) is a leading surface transport company. It provides a single window for cargo transportation services ranging from door to door distribution, time committed high value cargo delivery or handling of over dimensional cargo. The company continues to invest into Property for its warehouses and a bulk of the capital employed in the new expansion (10 mn Sq feet) is through the own model. That is some thing that we do not like. However, Do read our note on the company to know the investment arguments in favor of the company. Stock closed higher by 15%.

Bata is a well known name in the footwear industry. Bata is a well know brand with a leading position in India. In India it manufactures scandals, chappals, sports shoes as well as formal shoes. Bata rules the market in the school footwear sector. The top line for the June ended quarter improved by 12% YoY. EBIDTA margins improved by 300 bps on annualised basis. EBITDA stood at Rs.18 crs. The bottom line was up by 36% to Rs.12 cr. Given the momentum of change and the new focus of Management, we are willing to give the company the benefit of doubt. With an enhanced focus on returns and the big opportunity of growing faster than the unorganised market makes this company a decent bet. Bata closed higher by 4%.

Financial Technologies (FT) has honed the technology for straight through processing (Transaction handling ). It is also the promoter and owner of Multi Commodity Exchange in India MCX which now has about 70% marketshare in the commodity exchange market. The company is bullish on i-win which is a mobile trading platform to pick up. However we believe that the National Spot exchange and Forex exchange would be the drivers for its products. Do read our note on the company to know why higher valuations are justified. FT closed higher by 3%.

Technically Speaking: Sensex witnessed an intra day high of 15,692 and low of 15,469. Advances out numbered declines in the ratio of 2:1. Volume for the day stood at Rs.5,585 cr. Market ened up by 160 point but failed to close above the key resistance level of 15675. The trend is positive, so any fall should be used to buy into the rally. Key support on the lower side is 15480 and the key resistance is 15675--15725