Market Close: Jittery trade by Investors..

Downward start for Indian indices triggered by the global weakness but Asian indice traded mixed with Nikkei closing in green while Hang Seng ended in red. After yesterdays surprise rally Indian Indices took some hitting from investors as they traded cautious. Indices traded volatile through out the day, the entire day was lackluster ahead of FNO expiry week. But indices recovered to end with modest losses. Selling was seen across the board except Aviation, Auto and Realty stocks and selective Capital Goods. Mid caps stocks like Deccan Aviation, Ashok Leyland, Ceat and Cinemax were among the top gainers in this space. The small caps closed marginally up. Mundra port was one of the bumper listing today as it traded up 100% from its issue price. Currently Europe trading mixed.

Sensex ended down by 120 points at 19127.73. Weighing on the Sensex are losses in Bharti Tele (916.5,-3 percent), ICICI Bk (1132.4,-2 percent), Rel Energy (1755.45,-2 percent), Maruti (937.55,-2 percent) and NTPC (234.95,-2 percent). Losses are restricted by gains in BHEL (2672.95,+3 percent), Bajaj Auto (2653.05,+3 percent), SBI (2273.25,+1 percent), TCS (996.8,+1 percent) and Wipro (457.75,+1 percent).

Ceat Tyres rallied after the company reported of restructuring plans. As per the restructuring policy share holder would be issued 3 new shares of Ceat Tyres along with 1 share on the new company. The new company formed by Ceat would have the investments held by the group and which would also be listed. Post the implementation of the restructuring plan Ceat Tyres would continue to contribute to the top line. The higher input costs are a threat to the margins of the company. It has now taken the outsourcing strategy in order to maintain the bottom lines. The products are out sourced from China and manufacturing units of Pirelli. However, the strategy we believe would deliver only to a certain extent as the Chinese tyres lack quality to be successful on Indian roads. As result of this stock closed up by 16%. Compared with other players Ceat fails to be a fundamentally strong story; one can take a trading opportunity. Do read our note on this for more details.

Leading foreign investors like Goldman Sachs and Blackstone are in final stages of negotiations to buy 26% stake in India Infoline Distribution Co (IILD), the distribution subsidiary of the brokerage firm India Infoline, are willing to pay Rs 400 cr. The new subsidiary IILD, will take care of the entire loan portfolios of India Infoline. The company has a retail network of over 200 branches. It distributes financial products such as mutual funds, IPOs and fixed deposits, besides distributing mortgages and selling loan products. The financial services institution also boasts of a burgeoning insurance distribution business. In December 2006, India Infoline sold its stake in the subsidiary Khambhat Investment & Trading Co, a non-banking finance company, to Merrill Lynch. It has hired experienced hands from foreign banks including Citi. Recently, the company had also roped in four senior executives of CLSA. The company?s plans are to strengthen its position in the institutional trading segment, and also build a strong team in investment banking and private equity. The company informed that the Singapore-based Orient Global will acquire 22.5% cent stake in its consumer finance subsidiary for about Rs 300 cr. As a result strong futuristic plans stock closed up by 11%.

Technically Speaking: It was a volatile session for the whole day. Sensex touched intraday high of 19,212 and low of 19,019. Overall breadth was in favor of Declines, where the Advances stood at 1280, while Declines at 1463. The turnover was pretty low at Rs 5795 cr. Sensex has failed to cross above the 20DMA moving average in the current pull back rally. We are cautious till the expiry on Thursday. Sensex resistance lies at 19360 and 19520. Support lies at 18880 and 18500.