Weekly Close: Can nothing stop this raging Bull ?

Lets share with you what we believe is History being made. Indian markets are on an unprecedented bull run. It was fist the FIIs and now the Domestic Instutitions and locals who dont want to get left out. Markets kissed the big level of 20000 for the Sensex this week, However, that level was met with some profit taking. The RBI hiked CRR which saw some negatives and that was followed by a Fed cut of 25 basis points. The CRR hike by the RBI came in as a surprise though the US fed rte cut was on expected lines. Markets reacted accordingly. Much of it was discounted. Global markets crashed on Thursday and that impacted the Indian markets with a deep red opening. But the price action showed that the Bull will not die easily. The markets just bounced back. Rights issue of SBI was seen as the trigger and this recovery in banking stocks accompanied by value buying in the mid caps had the markets make a solid comeback.

Crude hit over $95 to a barrel this week and thats had the oil refining companies rolling down.. of course, Reliance Petro and standalone refiners were strong too and people kept guessing on the Chevron stake. The airline stocks crash landed on such high crude prices.

Sensex managed to gain over 3.5% this week This was with the capital goods and the power sector capital goods stocks which lead the way. Among the big gainers for the Markets were ABB + 11% BHEL + 11%, ICICI +12%, Larsen +15%, ONGC +17%. Reliance Energy +10%, Siemens +10%, State Bank +8%,

Among the laggards were ACC -4%, BPCL -5%, Bharti - 10% Cipla -5%. Dabur - 6%,, Hero Honda -8%, HLL - 10%, Jet - 10%, Mahindra -5%, MTNL -7%, Maruti -13%,

The Telecom sector was the one with a lot of action. The GSM players were on the receiving end of the markets with regards to the Spectrum allocation. We have not heard the last of this yet.. but for now Bharti and Idea may see pressure.

The Auto sector continued to be lacklustre to negative. Maruti results were alright and the sales numbers for October were quite good.but the launch of i10 by Hyundai and a more competitve scenario had the stock hammered down this week. Tata Motors numbers were clearly disappointing and that was as expected. The Auto sector has been a laggard and a CRR hike meant more negatives for the sector. Going ahead we believe that the psessure will remain here as well.

A couple of stocks worth mentioning are on the mining side. The Government is set to clear the Mining policy in the Winter session of Parliament. The companies with mines were in focus. Thiee include Jayaswal Neco, Raipur Alloys, Usha Martin, Electrosteel casting amongst others Solar Explosives also was up and this still we believe will be an interesting idea.

We had a research note on Greenply this week on the back of its performance. The company continues to grow well with good utilisation of its facilities. It has gone ahead and made a couple of acquisitions and this in the West of India and that serves its locational strategy well. The company imports 40% of its timber requirement and that gets assistance from an appreciating rupee

We had a results analsys note on Esab India which is into Welding Electrodes and growth has been muted as well. The topline was flat but it was margin which got impacted because of higher raw material costs. Going ahead we remain confident on the back of higher infrastructure spend and the amount of steel which is to be produced. The big trigger is that Charter Plc which is the parent has increased stake through an open offer and that means that the story is well set for bigger plans. May be a meeting with Charter Plc will yield something new.

We had a results analysis of Titan. The company is doing well . The company to grow th gold jewelry business by over 45% and the margins too were better as studded jewelry now accounts for 35% of the segment. The Time segment also did well and its important to note that the festive season this year will be in the 3rd quarter. The results were good. Valuations is where the story turns into a Horror movie. Do read that note.. on what potentially are the triggers here.

Next week, there is nothing much to talk already. We are heading into Diwali which is the biggest annual festival for the markets. With such a strong performance, even when the global markets were down, the confidence would be riding high. Can we do 21000 for Sensex. The talk is for that.. but we would rather keep our heads on our shoulders. Going ahead for the Indian markets, no further hikes are possible. The Next action from the RBI will be the rate cuts. Thats positive for the banking sector and one could expect action there. We already saw that happening this week. There is a possibility of fuel price hike but the Government has an eye on elections and that may not happen. The negatives if at all are likely from the Global issues. Markets are likely to remain volatile with an upward bias. In such markets our performance is exceptional. Do have a look at last weeks performance and thats really heart warming.

Technically speaking: Sensex faces resistance at 20050 and 20200. As trong Support at 19700 and 19260. Expect more Volatility and some upsides in Midcaps..