Weekly Close: Holiday Mood !

The week started off on a major negative note. The culprit was the global credit crunch which finally impacted Indian Markets at least on sentiment. Selling was largely by foreign funds and the buyers were the domestic funds to an extent. Domestic fund were active and when the retail investors are active it is the mid caps and small caps which tend to do very well. Mid caps continued to gain confidence though they too saw intermediate levels of profit taking.

Investors shunned positions ahead of a long weekend so as to avoid event risk of the US markets over the weekend. Sensex tumbled 4.41% for the week to close at 19163. There stood two gainers Satyam by 4.11% and Infosys +3.23% while the numbers in losers were large; HDFC -11.14%, ACC - 8.68%, RCom -7.22%, NTPC -6.97%, TISCO -6.47%, Hindalco -6.44%, RIL and DLF both down by -5.89%, SBI -5.62%, Maruti -5.21%, ICICI Bank -4.71%, LNT -4.67% and Bharti -4.04%.

Global economy: India is quite integrated in the world economy and US being a big portion of that gets a big focus. Slowdown there certainly has implications which cannot be ignored. There was an event with the US Government intervening to save the borrower. That had big implications and could have further also. Rate cut is also trend across the developed nations.. Probably we may provide support. It is clear, that the US Administration will do as much as possible to ensure smooth landing of economy. How this plan can help cleanse out the system is not clear. Someone has to pay for the excesses and it so appears that the companies who have lent may bear the pain. Government intervention in a capitalist economy like US may shake investor confidence. We wont comment much here. We really wonder that Govt. intervention would help or it is just delaying the worst. Time will only tell. On Indian economy front story remains strong but on the markets front it could be different.

IT counter had bounced from there lows. Many papers reported that adverse over rupee is priced in and it may time to see something good here. The Result season is ahead and IT cos who are normally the first to declare numbers saw the trading interest. We agree that rupee impact is done .. US slowdown could weigh here. Banks are the major victim in US and big clients for Indian IT Cos. We don't expect any major turnaround here unless and until things get better in US. The stocks may see some upsides but there are headwinds of an appreciating rupee, the Tax sops going away and then the pressure of salaries.

Our research cover many stocks is our research and delivery from there was wow !

Gillette India continued to hit circuits. FMCG firms are considered as defensive play in weak markets. But Gillette itself has a growth story. It is a play on number of growing young population in India. Right now the grooming market is dominated by double edge blade system. Disposable income has increased and so also the purchasing power. Interesting to see that better lifestyle will see more numbers young men will move to the twin edge space. Gillette is well placed with its premium brand. The company has also reduced the price so as to cater the mass. The company would also leverage on on distribution network of P&G post merger. We are positive on this one with a long term prospective.

WWIL is one were our research will follow soon. The company is Multi System Operator (MSO) which provide Cable services through Local Cable Operator (LCO). Right now the prefer mode of cable viewing is Analogue and this system has led to under subscription for the industry. With digitalization major portion of under subscription would be disclosed to MSO. The industry very large but highly fragmented. MSO's are seeking consolidation in the industry. Thing would improve with digitialisation and consolidation. But this will take its own sweet time. Do await an interesting note here.

Garnet is one of the gems in our research. The company has huge land bank and it would used to develop bungalows. Now its time to cash here.

Indian Seamless Metal Tubes Limited (ISMT) produces specialized seamless tubes in India. ISMT caters to various industries like Auto, Bearings, Oil Explorations, Construction, Boilers, Engineering & Hydraulic applications. Considering the good future prospects of power segment, the company intends to focus on the power segment to sell more seamless tubes required in the Boilers and Heat Exchangers. ISMT is also into steel.. Pig iron and sponge iron route. The complete steel is procured in house and some of it is even sold. This gives an advantage to ISMT for using the right kind of alloy steel for specialized applications. More Details in our note and also our views

There was more research, including VIP Industries, Mold Teck and othres.

Technicaly speaking: Sensex has a clearly defined Resistance above 20000 on weekly basis. We see the short term trend as negative and 18500 seems to be more likely in coming days.Traders should reduce their longs on pullbacks upto 19500--19700.

Next week is the expiry of the December Futures and there is also the holiday for 25th for Christmas. Action will be limited but a Santa Claus rally can be expected as stocks get helped for the bonuses of the Fund Managers. Fundamentally, though there is little reason to be positive. News flow will be limited and with China having hiked interest rates, the emerging markets may react a bit cautiously.