Market Close: Finally 20k Conquered! Whats Next?

Significant day for Indian Indices with strong cues from global markets helped Indian markets to see new high. After firm start indices continued north bound journey continued with strong interest in index heavy weights. Rally was ahead of Fed meet scheduled today where it is slated to cut rate. Sensex and Nifty surpassed the previous highs, Sensex made new high of 20,333 during the id session and Nifty crossed first time ever historic milestone of 6,100 mark and closed below life high. Profit booking has its hand but indices managed to recover to end strong. Asian Indices closed in green with HangSeng ended up over 725 points while Europe is trading the other way i.e in Red.

Buying was seen in most of the sectors except IT, Power, Fertilizer, Sugar and selective stocks in Capital Goods. Fertilizer stocks which were rallied so far on hopes of more subsidy, profit booking was seen today. Realty, Banking and Pharma stocks cheer the day. Mid and small cap were also in action, the index made all time high and closed in green but could not outperform the front line indices.

Sensex ended up by 360 points at 20290.891. It was helped up by gains in Bharti Tele (1030.7,+6 percent), HDFC Bk (1774.7,+5 percent), ONGC (1238.45,+4 percent), Hindalco (199.55,+3 percent) and ICICI Bk (1316.05,+3 percent). Restricting the gains are Infosys (1743.05,0 percent), BHEL (2670.25,0 percent), Guj Ambuja (150.5,0 percent), Rel Energy (1945.65,0 percent).

Leading credit rating agency, ICRA assigned an `A1+` rating to the Rs 100 cr short term debt programme of Unitech. Till now this is the highest credit quality rating assigned by ICRA to short term debt instruments. Instruments rated in this category carry the lowest credit risk in the short term. This reflects Unitech established position in the real estate sector with presence across all segments. With increase in number of launched new projects, Unitech profit after tax increased from Rs 87 cr in FY2006 to Rs 1306 cr in FY2007 while the ratio of Net Cash Accruals (NCA)/Debt increased from 7.61 % to 31.81 % in the same period. It has announced huge growth plan over the period. It has a land bank of around 20,000 acres now has big plans for the retail segment. The company announced an investment of Rs 20,000 cr for developing 48 malls over the next six years. In the first phase of two years, it will develop 24 malls with retail space amounting to 60 million sq ft. The company has also applied for license to operate as a telecom service provider. This will open up a new space for the company to grow with ambitious plans in organised retailing and telecom services, and given its dominance in the real estate segment. Unitech is well placed to capitalise the new opportunities. On hopes of leveraging the stock closed up by 8% which helps to reduce the interest cost, while improves the bottom line.

Telecom space in action after subscription numbers for the month end November were out. India's leading GSM based mobile operators added 5.82 mn new subscribers in November maintaining a rapid pace in the world's fastest growing wireless market. Bharti added 2.05 mn subscribers Vs 2.03 mn up by 1%, Idea added 8 Lakh subscribers up by 7%, Spice added 91,147 subscribers up by 3%, MTNL added 63,867 subscribers up by 19% while Rcom is yet to release its numbers. The mobile market in India is booming with availability of cheaper handsets and expansion of networks to smaller towns and rural areas. The potential growth is robust with only 19 mobile users out of 100 people in the country of more than 1.1 bn people which give more space of opportunity. Looking at the growth in this pivotal we see there will be more cost fight which will directly hit margins & Avg revenue. Growth in subscription keeps stock up. Bharti closed up by 5.83%, MTNL up by 7.52%, VSNL up by 4.30%.

Technically Speaking: Strong session through out the day, Sensex closed above 20k. Sensex touched intraday high of 20,333 and low of 20,019. Overall breadth was in favor of Advances, where the Advances stood at 1933, while Declines at 907. The turnover was pretty good at Rs 8179 cr. Sensex has broke away from its Resistance at 20000, we might look towards 21000 by the end of the week, if no negative news falls in.