Market Close: Wobbling with no clear direction

Volatile session for the India market with nothing big to support. Indian counterparts the Asian Indices traded weak for the day. Indices kept wobbling on both side through the day with no clear direction. Midcaps and small caps continued to keep Investors interest as compared to the heavyweights. Metal, power and realty were among gainers while IT, banking and auto sector witnessed the selling pressure. All power stocks traded strong with the news of Reliance power getting listed in 11 Feb 08. Markets seem to be in the consolidation mood after recovering from recent fall. European indices are trading in red.

Sensex ended up by 4 points at 18663.16. It was helped up by gains in NTPC (223.1,+4 percent), Ranbaxy (387.25,+4 percent), Dr Reddys (544.45,+3 percent), Hindalco (181.95,+2 percent) and TISCO (817.8,+2 percent). Restricting the gains are Hero Honda (726.8,-6 percent), TCS (949.45,-3 percent), Maruti (872.35,-3 percent), Bajaj Auto (2404,-2 percent) and Wipro (454.3,-2 percent).

Tata Consultancy Services (TCS) one of India's leading software company has asked 400 employees, who had an experience of less than 2 years to resign. Just a couple of weeks ago there were reports that TCS had cut salaries. TCS has announced a pay which is EVA linked and it is clear that salary revisions this time will bring in much disappointment to the software employees. Few days back there were reports that IBM had laid off 700 employees. We recall that Zensar had similar talk couple of months ago. We are aware that Infosys has also seen some pink slips. Most of these are attribued as employees / trainees not upto mark. But clearly suggest that life is not as hunky dory as it seems to be. The software employees have been spoilt given the strong demand scenario which prevailed. What has hit them is not only the no hikes but the gains on their stock option which have gone down. Clearly employee satisfaction will be an issue to handle. We believe that with US, the largest geographical client facing serious slowdown. Software stocks are best avoided for now.

Technically Speaking: Markets ended flat after wild swing with no clear direction. Sensex made an intra day high of 18730 and low of 18510. The breadth was in favor of Advances as there were 1907 Advances against 882 Declines. Market turnover still remains low at Rs 5301crs. We maintain our Sensex target of 19200. More stocks are moving into the pullback rally. Sensex support stands at 18500 and 18300 level. Resistance lies at 18750 and 18860.