Market Close: Bounce back on global support

Good day for Indian markets carried the way with positive global cues. However, at higher levels profit booking was seen and markets slipped in red losing all the gains made earlier. Volatility was seen despite some strong cues from Asian peers. In Mid session value buying was on cards after European markets opened in positive curve. Sectors like Metal, IT and Pharma space were in focus while selling continued in selected Bank and Capital good stocks and market trade 400 points down for days high but eventually managed to recover smartly to end in green. Depreciating rupee helped IT cheers to gain the Counter. Sugar stocks continue to hold out as global sugar prices are up while other sectors were sluggish. Mid and smallcap companies traded well to end up in green. Europe continued to trade in green.

Sensex ended up by 117 points at 17734.68. It was helped up by gains in Satyam (458.2, +8 percent), Hindalco (189.45,+7 percent), Wipro (431.65,+5 percent), TISCO (806.05,+4 percent) and Infosys (1630.3,+4 percent). Restricting the gains were HDFC (2648.55,-4 percent), ICICI Bk (1143.85,-2 percent), BHEL (2092.05,-2 percent), SBI (2179.3,-1 percent) and Grasim (2804.05,-1 percent).

Adhunik metal stock was on limelight. Company recently reported Q3FY08 results which were broadly in line with our expectation on the topline front. Stock is on buzz that it has successfully commissioned its rolling mill and SMS II taking capacity to 400,000 tpa in Q3FY08 and commenced trial production it commenced commercial production from January 1, 2008. Thus, a wide range of rolled products will now be available from the plant which earlier had to be outsourced from third party rolling mills. This is expected to add Rs 60 Cr to the topline in Q4FY08E. It is in the business of manufacturing sponge iron, TMT Bars, special grade high carbon and low carbon steel billets along with different grades of alloy steel billets. The primarily growth will be driven by higher realization as a result of rolled products ( rolled from outside rolling companies as its own rolling mill is likely to come in FY08). AML is expanding its steel capacity by 1.8x at a time when steel prices are expected to be firm going forward, led by robust demand in most regions, current supply tightness global capacity utilization of 90%, decreasing Chinese exports and raw material cost push pressures. We believe AML is well placed to reap the benefit of increasing iron ore and manganese ore prices. One can hold this stock looking at longer term perspective.

HCL closed 6% higher along with other IT gainers. HCL Technologies has acquired CapitalStream, a US-based lending automation solutions provider, in an all-cash deal for US$ 40 m. Capital Stream has a flagship product called FinanceCentre, which is used by top banks like Bank of America and Rabo Bank in North America. FinanceCentre, a multi-tier web-based application, provides end-to-end solutions from prospecting and sales, credit analysis, due diligence, documentation and portfolio monitoring to financial institutions and banks. The product is currently used by over 20% of top banks in North America. The acquisition of Capital Stream will enhance HCL's ability to provide end-to-end solutions through product and multi-service delivery capability to commercial and retail financial institutions. Thus, this strategic acquisition is in line with the company's objective to grow inorganically to be a global leader in selected industry verticals.

Technically Speaking: Market traded volatile with positive breadth to end in green. Sensex made an intra day high of 17887 and low of 17482. The breadth was in favor of Advances as there were 1465 against 1253 Declines. Market turnover continued to be low at Rs 5383 Cr. At this juncture Sensex support is seen at 17500 and 17250 and resistance lies at 17800 and 17900.

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