Close: Market tumbles... Caution across the board

It was a disappointing session for the market that witnessed selling pressure through the day. Markets opened weak on behalf of weaker cues for the global front. Higher crude prices which touched $100 per barrel, was one of the reason for weakness. Airlines stocks were majorly affected by this and markets turned negative. Major selling pressure was seen in Banking, Capital goods, Realty, Metal, Oil and Power space. A gap down opening in European markets worsened the situation as selling increased from the institutions. Europe opened sharply lower on news that Alliance & Leicester Plc, the second worst performing UK bank reported profit declined 67 % in the second half as funding costs rose and it lost money on leveraged loans. IT sector was the only gainer as Dollar gained strength against the Rupee and crossed the 40 mark. Midcap and small cap stocks also closed in deep red. All other sectors witnessed selling pressure to end the Sensex down 458 points in red. European indices are trading in negative terrain.

Sensex ended down by 448 points at 17628.01.Weighing on the Sensex were losses in Maruti (764.9,-5 percent), TISCO (772.6,-5 percent), BHEL (2124.2,-5 percent), Tata Motors (705.7,-4 percent) and ICICI Bk (1166.8,-4 percent). Losses were restricted by gains in TCS (884,+1 percent), Infosys (1568.25,+1 percent), Bajaj Auto (2339.5,+1 percent), Satyam (422.5,+0 percent) and Guj Ambuja (116,+0 percent).

Karuturi Networks was locked on its upper circuit limit. Karuturi is the largest rose player in the world. It has 2 segments of business, Horticulture and ISP. More than 90% of the revenue comes from the flower business. Karuturi has a total capacity of 650 mn stems. It has 10 hectares in India with 10 mn stems capability inhouse and another 25 mn stems which are managed through contract farming. 100 hectares are operational in Ethiopia with a capacity of over 100 mn stems. Karuturi Networks has been allotted additional 450 hectares of land by the Government of Ethiopia for its expansion and diversification projects. The Kenyan acquisition of Sher brought in about 525 mn stems. Globally 40,000 hectares of land is under rose cultivation. However, the field sizes globally are fragmented and are not over 200 acres. Karuturi is one of the big players here now. Feb is the peak season and March results excel for Karuturi and we are positive on this business. Do read our research note to know more .

Blackstone world's biggest buyout fund, managed to acquire 10.38% stake in Allcargo Global at premium prices of Rs 934 per share for the stake in the company. B?stone has further plans to hike the stake that can be picked up anytime from the secondary markets and increase their stake to 14.94%. All cargo will utilise this fund in developing container freight station and ICDs in different parts of India and other expansion plans. Allcargo Global Logistics (AGL) is a Mumbai based logistics service provider mainly involved in multimodal transport operations (MTO), Container Freight Station (CFS) located at Nhava Sheva container port and handling of Turnkey projects for cargos. Major part of the revenue is derived from MTO segment.AGL?s CFS business shares 12% in the market where as in MTO segment there is no neck to neck competitor in India. It has acquired 100% stake in Belgium based NVOCC major ECU-Line a multinational and a leader in cargo consolidation operations, which caters to about 5,000 destinations around the world. Valuations are expensive but we are positive on the logistic business. We have a detailed note that can provide you a clear picture on the company. Do have a look on this. Stock ended up 8% on the news.

Technically Speaking: Markets traded weak with negative breadth and on the global front there was nothing to support to close down 448 points in red. Sensex made an intra day high of 17991 and low of 17506. The breadth was in favor of Declines as there were 825 Advances against 1917 Declines. Market turnover was low at Rs 4791 Cr. With the volatility in the market Sensex support is seen at 17250 and resistance at 17800 levels.