Market Close: Choppy sessions post the santa rally?

It was a choppy day for the markets on last F&O expiry session for the year 2007. Indian markets had a good start with gapup points but sooner gave up most of its morning gains made and traded absolutely flat till mid session. Trading session continued to be choppy through out the day with occasional dips in negative territory. Alternate bouts of buying and selling activities restricted the movement of the indices within a narrow range but However 20K level was maintained till the final hour. For the December F&O series Nifty was up 8%, BSE smallcap up 21%, Nifty rollover position was seen at 75% Vs 60% last month and market wide turnover at 80% which shows market outlook looks positive. Small cap (up 2.2%) counter continued to witness buying interest and out performed the mid caps and index heavy weights. FMCG, Metal, Oil and Power stocks traded with buying support while Auto, Reality and Pharma counter were under selling pressure. Asian markets ended in mixed cue while European indices continued to trade marginally higher in green.

Sensex closed higher by 24 points at 20216.721. It was helped up by gains in Wipro (549.3,+3 percent), HDFC Bk (1744.95,+2 percent), ICICI Bk (1242,+2 percent), ITC (203.35,+2 percent) and TISCO (906.35,+2 percent). Restricting the gains were Tata Motors (736.7,-2 percent), Satyam (451.4,-2 percent), RCVL (730.8,-2 percent), Bharti Tele (966.3,-2 percent) and Ranbaxy (411.5,-1 percent).

Capex plans announced by Videocon Ind were the primary reasons for Videocon ind to be in lime light. Company intends to invest $ 5 bn in power projects in Gujarat and has announced bids for the project. Videocon is a well known player in the consumer durables industry. Margins from the consumer durable business of the country can come under pressure with increase in the organised retail by players with deep pockets. The other business of the company includes oil extraction, where company has 25% partnership. Unconfirmed reports state that the company intends to re structure its business and separate the oil exploration business and the consumer durables business. That would be done with an intention to unlock the share holders. Any fresh position in Videocon at this point is not recommended from the long term point of view till more information is revealed by the company. However, trading up sides are worth considering as the volumes have increased considerably on this counter. Videocon Ind closed higher by 9% for the day.

Karuturi bloomed amid choppy sessions on the back of strong fundamentals and closed higher by 10%. Company is the largest Rose cultivator in the country. The proposed acquisition in Kenya would make company the largest cultivator in the world. Karuturi has 10 hectares in India where it produces 15 mn stems. The company has 50 hectares operational in Ethiopia with a capacity of over 80 mn stems. An additional 50 hectares is planned and expected to go live next year. Karuturi Networks has been allotted additional 450 hectares of land by the Government of Ethiopia for its expansion and diversification projects. Cost of air freight out of Ethiopia is $1 per kg of rose as against $2.5 per kg out of India, a 60% cost saving. Setting up operations in Ethiopia, it could avoid a customs duty of 28% levied on goods entering the US. We are positive on the company and have a wow call running on the company as well. Do read our note on the company to know more.

Technically Speaking: Markets traded in narrow range with positive market breadth . Intra day high for the day was 20,324 while sensex touched an intra day low of 20,160. Advances out numbered declines in the ratio of 3:1. Resistance is at 20,600 levels while support lies at 20,020-19,710 levels. Volume of Rs 8,232 cr was churned out through out the day.