Market close: Govt. subsidise market !

Clearity regarding the nuclear deal from the left coupled with good support from the global indices set the stage for the markets to rally. Indices zoomed up in the positive territory right from the start of the trading session and there was no looking back thereafter. Index heavy weights like Reliance, Suzlon, SBI and L&T were the leaders for the day. The small and mid caps also outshined. Investors rushed for the fertilizer stocks after the Govt announced its proposal to issue fertilizer bonds worth Rs 4,000 cr. Oil marketing companies were also a part of the rally as the crude prices dropped. Telecom stocks were in demand after the major services providers reported their monthly sales numbers for the month of October. The major gainers for the day were on the Banking, metal, Power, reality and consumer goods sector. European indices continues to trade in green.

Sensex closed higher by 894 points at 19929.061. It is helped up by gains in HDFC Bk (1749.1,+11 percent), ICICI Bk (1277.9,+9 percent), RIL (2887.5,+7 percent), Hindalco (217.65,+7 percent) and Wipro (471.2,+7 percent).

Mcnally zoomed and ended higher by 5% after the company bagged order of Rs 34 cr. Company received an Order from Maharashtra State Power Generation Co. Ltd., Mumbai for Design, Manufacture, Supply, Erection, Testing and Commissioning of Ash Handling System with all accessories for their Paras Thermal Power Station Expn. Project. The company provides turnkey solutions in the areas of Power, Steel, Alumina, Material Handling, Mineral Beneficiation, Coal washing, Ash handling and disposal, Port Cranes, Civic and Industrial water supply etc. McNally also manufactures wide range of equipments used in construction, mines and metal production. It is a leading Engineering Company involved in Turnkey solutions with its advantage of being located in the East. Steel and Power sector projects are lined up and they are expected to boost top line / order book in a big way. Results were healthy but valuations appear expensive. . Do read our note on the company to know why the L1 status of the company is a strong investment rationale in favor of the company.

Navneet publications continued to rally and ended higher by 9% after delivering a good set of numbers for the September ended quarter. Topline grew to Rs 82 cr from Rs 60 cr up by almost 35%. The publishing division reported sales growth of 48% to Rs62 cr. The operating profit from publishing department alone grew by 85% on a yearly basis to Rs 16cr. The EBITDA earnings were up 44% to Rs 12.5 cr while the EBIDTA margins improved marginally. Net profit increased to Rs 8.4 cr up by 77% yoy. The company?s NPM improved by 240 bps to 10.2% from 7.8% a year ago. Company enjoys monopoly when it comes to the orienting of the text books. That coupled with other e learning initiatives taken by the company makes navneet a long term investment story. Do read our note to know why the valuations seem to fair as the stock trades at 15 times its earnings.

Technically speaking: Indices traded between a broad range of nearly 600 points. Sensex traded between an intra day high of 19,988 and low of 19,337. Advances outnumbered declines in the ratio of 2:1. Volume for the day stood at Rs 8,796 cr. Markets close just below 20050 which could be a good resistance. As we have been talking recently for big moves in Midcaps and smallcaps, the markets still look good for buy on dips for midcaps and smallcaps.