Power on Market Gone!!!

The week started with disappointing listing of much awaited Reliance Power coupled with weak cues from the global markets. The markets opened with a gap down and continued the slide with selling pressure in almost all the counters. After Reliance Power (REPL) listed with marginal premium tremendous selling pressure kept the stocks down with value buying at every lower levels. Sensex crashed over 1,000 points at mid session on continued panic selling by funds and retail investors following a weak trend in the global market after Europe started in negative region. Every attempt on recover curve at the lower level was hit by heavy selling waves. Both the indices traded under deep pressure for most of the day and ended with substantial losses. All the key counters ended deep in red led by oil & gas, metal, power, realty and banks. IT pivotal was the only star performer for the day and managed to hold in green. Mid & small caps could not escape and ended down in line with front liners. Asian markets ended with deep cut and Europe opened on weak note and trading mix.

Sensex ended down by 834 points at 16630.91. Weighing on the Sensex were losses in Rel Energy (1582.3,-19 percent), RCVL (590.4,-9 percent), HLL (195.95,-7 percent), NTPC (189.6,-7 percent) and SBI (2045.25,-7 percent). Losses were restricted by gains in Satyam (423.85,+3 percent), Maruti (811.95,+1 percent), Infosys (1558.75,+0 percent), TCS (903.2,+0 percent) and Wipro (423.5,+0 percent).

A report on the street says that Telecom Commission has approved DoT?s proposal to sell 773 acres of surplus land in four cities which was earlier owned by VSNL. The land was kept out of the deal of disinvestment of VSNL. Market value of the land is estimated to be around $2.5 billion. Tata?s are also reported to be eligible to participate in the auction. The proposal to sell the land has been pending since 2002. DoT had to do a detailed analysis of the various options available to make use of the land. DoT came up with three options. The first was to hive off the surplus land into a realty company set up specially for the sale. The second was to allow VSNL to retain the land at a ?fair consideration,? while the third option was to auction the land. After detailed deliberations the option for sale of surplus land by open auction was approved in which VSNL will also participate which was the reason for the stock to trade well in green in a volatile selling markets.

Tech stocks ended the day in green on the back of Cognizant's strong guidance. US-based IT and BPO major Cognizant Technologies Solutions (CTS) has projected at least 38% rise in revenues at $2.95 billion for 2008 despite fears of the world's largest economy falling into a recession. CTS had reported 41% increase in its revenue for the Q4 December 2007 at $600 million from $424.4 million in the corresponding period last year, driven by strong growth across the business segments, service offerings and geographic regions. CTS derives around 81% of its clientele from North America and particularly from the BFSI vertical, hinting that IT budgets will remain robust, notwithstanding economic uncertainties in the US market. Indian IT firms derive majority of revenues from exports to US. Indian firms like Infosys Technologies (up 0.88%), Satyam Computer (up 2.93%), and Wipro (up 0.13%) edged higher while closing.

Technically Speaking: Market traded weak on domestic selling pressure and global weakness followed with negative market breadth. Sensex made intraday high at 17427 and low at 16458. Overall breadth was in favor of Decliners where the Declines were 2465 while Advances stood at 238. Volume was also subdued for the day at Rs 5022 Cr (Does not include R Power volumes). Sensex has closed below the 200dma and is likely to move in the range of 15700 to 18400 for next month. Immediate support 16400 and 15700 and resistance at 17500--18000--18400. We advice traders to be cautious and wait for the right time to entry the market.