Close: Ready for subprime levels !

This week market had roller coaster ride. The global woes had Indian markets on their knees. The huge liquidity was seen flowing out of the system. US market had the subprime market worries with the crises expected to spillover beyond the credit markets. Globally markets buckled on US woes. The worry was also fuelled by CRR hike expectations which did come in Given that these were in line with expectation, Markets rallied only to fall sharply the next day on Global woes. Though markets recovered from this, the impact will be seen gradually.

Sensex lost less than 1% this week about 105 points. There was a 670 points swing in Sensex for the week between a high of 15569 and low of 14896. Madcap index was 0.3% up. IT down 3.5%. Auto down 3%. Capital goods index 2% up. Oil and Gas 2.5% down.. The big losers included Infosys (-4%), Mahindra (-12%), MTNL -5%, Nalco - 10%, Suzon -5%, Tata Motors -6%, TCS -5%, Wipro -4%, Zee-5%, SBI was the only hewavyweight gainer up over 4% for the week clocking +9% gains.

We covered Reliance with some cautious comments on Reliance earlier in the week and the stock got whacked. Do read our views on he same in Economy: Stocks in action:

We had a note on Greenply which has been a wonderful performer. We believe that the business is now ready to catch momentum even though its up significant since we initiated coverage. The benefit of taking marketshare from the unorganised sector is expected to flow in and this is the large player with a fantastic distribution set up well placed to exploit it.

We had a detailed research note on ABG shipyard. The stock gained 14% this week. The Industry is well placed to exploit the global opportunity of ship building. The Government is backing it with a subsidy. The company managed to bag a large order and the orderbook now stands over 5500 crores. We believe that the business is good but valuations are pricing in too fine an execution. Do read the note.

There was more research as well.. including the results analysis for MoldTek, Nestle and so many more..

Technically speaking.: On a weekly closing there Sensex close was comfortable though on a daily basis the closing was below the trendline support. 15230 is a resistance but the big ones are near 15380 - 15497. In terms of support 14890 is a support but 14830 is crucial and below this markets may see more pressure.

The momentum is now broken and value buying by locals feeling left out is more likely to be met with profit taking.. making it more of a consolidative phase. We fail to find catalysts other than global bounces for markets to see further inflows and test the recent highs.

Fundamentally speaking: The results are all out and there are not many triggers left. There are hopes for an interest rate cut but with crude a $ 77 thats unlikely to happen. Growth in certain sectors has started to slow. The sectors performing are the ones which depend on Government spend. Markets may see some value buying but on valuaton basis the risks have increased given the volatility. This itself should lead to lower valuations. All in all.. we dont seem to be positive. But, thats not out of choice. We believe that the global risk of subprime lending is not play out and we have not heard the last of it. Understanding the way it works, it could grow on itself. Also the Yen carry trade is another issue we have to live with. A US rate cut is what many in the US markets are hoping for, but that would imply a weaker dollar. Having said all this we believe that there would be opportunities and we will be there looking for them for you at wow-iindia.com. Its not going to be easy and sifting through will be a tough job.

Market Close: Ranged sessions but ends strong.

Markets ended the day on a strong note with firm global cues supporting in early sessions and buying momentum was seen across major index heavyweights. Indian indices started the day on a firm note but witnessed some volatility in the last sessions as investors started booking profits at higher levels. All the sectors closed in green with Auto, Banking, Cement and Metal leading the rally with some value buying. Mid caps outperformed the day while the small caps closed inline with front line indices. Educomp rallied for second consecutive day after RBI permitted FII to raise their stake up to 100% in the company. Investors sentiments were also high following the good response to FPO of ICICI Bank which has been subscribed 3.10 times. Major Asian markets closed in green while the Chinese Market closed in red.

Sensex closed up by 116 points at 14411.95. It was helped up by gains in Guj Ambuja (118.2,+5 percent), SBI (1425.2,+4 percent), Tata Motors (686.9,+4 percent), Grasim (2512.8999,+3 percent) and Maruti (768.6,+2 percent). Restricting the gains are Ranbaxy (351.85,-2 percent), TCS (1145.8,-1 percent), NTPC (150.3,0 percent), HLL (188.5,0 percent) and Infosys (1954.1,0 percent).

Elecon Engineering Ltd (Elecon) is one of the India?s leading manufacturers of Material Handling Equipment and Gear boxes. Elecon has delivered fantastic results for Q4 and FY2006-07. For Q4 the Revenues grew by 52% to Rs 285 cr on yoy basis, the Net profit surged up by 54% to Rs 19 cr on yoy basis. The Ebidta stood at 14% which enhanced by 150 bps. Ebidta improved by 68% to Rs 39 cr on yoy basis. For FY2006-07 Revenues grew by 58% to Rs 723 cr and the bottom line grew by 82% to Rs 55 cr on yoy basis. For the year Ebidta stood at 15% to Rs 112 cr enhanced by 85% on yoy basis. At the current market price of Rs 497 the stock trades at 28 times of FY06-07 earnings. We dislike this PE. The management has announced capex plan of Rs 120 -150 cr. Rs 80 cr in Wind mill gear box, capacity of 1mw to 2 mw. Presently, gearboxes for 1MW to 2MW are being imported. Initial turnover of Rs. 100 - 150 cr is expected in first full year of operations that may happen in 2008-09. The balance is in Material handling division. The company has given the guidance of Rs 1000 cr for FY 2007-08. This seems to be a good story for long term investment one can accumulate at dips. The stock closed up by 1.6%.

Auto stocks closed in strong note for the day. Tata Motors launched a mass transport passenger vehicle - Magic, developed on the platform of its popular mini truck Ace, while also unveiling a higher capacity van - Winger. Magic has a sitting capacity of 5-8 people, and priced at Rs 2.6 lakh (ex-showroom Pune) while Winger, an eleven seter sitting arrangements, is competitively pegged at a starting price of Rs 4.7 lakh. We are not too enthused by Magic as Its just a replacement for the Maruti Van, which really did not do well. The Winger could be a threat to the bread and butter UVs of Mahindra. Tata Motors closed up by 3.70% while its peer Maruti and M&M closed up by 2.84% and 1.52% respectively.

ABG Shipyard closed 4% higher for the day on back of good set of numbers reported by the company for the full year ended March 2007. For the fiscal, the company achieved sales growth of 30% yoy. The operating margins of the company expanded by 1.7% to 27.7% led by lower raw material costs (as percentage of sales). The benefits of margin expansion were visible in the company's profitability, with net profits for the fiscal recording a 39% yoy growth. The current order book stands at about Rs 4000 cr which looks good for the company. The Board has recommended a dividend of Rs 1.5 per share (dividend yield of 0.4%). As regards its peers, both G.E. Shipping and SCI (up 1% each) also closed in green.

Technically Speaking: It was a ranged session for whole day before closing on a firm note. Sensex touched intraday high of 14449 levels and low of 14347 levels. Sensex has made an upward breakout and clearly headed uptrend with a gap support of 14300 level. The next resistance can be seen at 14570 levels targeting to 14700 levels. Market turnover was pretty good at Rs 5049 cr. Overall breadth was in favor of Advances, where the Advances to Declines ratio stood 1.5:1.

Weekly Close: Markets Looking for direction !

It was a holiday week with markets closed for 2 days in the middle. Markets started with a big negative with ICICI results declared being quite disappointing. Also the intention to raise huge money is what had the markets squirming. All banks saw some pressure on Monday. However Markets made a recovery helped by the cement, steel and Tech counters. The Rupee was weaker on Monday on expectations that the RBI was ready to intervene having increased the Monetary stabilisation funds availability. With holidays the participation was surprisingly not less. There was good level of activity. The two wheeler numbers were a disappointement. Hero Honda did well but Bajaj and TVS numbers were extremely disheartening. Tough to digest the view that the industry growth will slow to 5%. We were expecting benefits of the lower priced excise free bikes to spur growth. But that does not seem to be happening. Bajaj Auto rallied despite bad sales numbers for April on talks that the business split would be discussed in May. Cement stocks got a gift of sorts from the PM with the Dual excise regime shifted to an advalorem one. The impact of this is not too positive but it does away with the negative of the head on conflict between the Finance Ministry and the Cement industry. It is clear now that there will be no cement ban.

Sensex closed flat this week. Nifty however gained half a percent. The gainers were ACC + 4%; Bajaj Auto +4%, Gail 8%, HCL t +4%, Hero Honda +4%, Tata Power +4% Among the major losers was HLL which was down 6% this week. topnew.gif (1104 bytes)

Stocks delivered this week as well.

Castrol was a winner this week and that was over 25% gains on the wow call. Castrol benefits from an appreciating rupee and a weaker crude oil. Base oil prices are slipping and thats what brought in the interest. We expect this company will be compared to an FMCG plays as its Workshops come online. The Lube business however will see pressure from higher life and better quality engines which use even less Lube oil. There are talks that the parent may buy it out and get it delisted.

Aftek was another one giving in some smart gains this week.. though we closed the call with some gains. HPCL also gave gains and so did D-link. We closed RTS power with decent gains. The company did not report any good results.

The tyre companies are doing well. We had research put out for Apollo tyres. The companies performance has been good and with lower rubber prices life is quite easy here.

Technically Speaking: Markets are taking a breather. A close below 13828 would have the markets headed for 13500 levels. It would be a major negative because a lower top has been set up. So its important that 14390 is taken out on the upside. However the resistance at 14240 needs to be taken out ahead of that.

Fundamentally speaking : Results are coming in still and the Auto majors are the ones to report and also the biggie SBI. Almost all others have been fairly ok. There is nothing which these numbers will change. However inflationary pressures across the globe are increasing. The appreciating rupee offsets that to some extent.. but inflation in India continues to be high and this is despite the base effect. So really we are concerned. We believe that the upsides will be tempered by inflationary pressures.

Market Close: Looking for direction ahead of the results !

It was yet another day of consolidation and the markets ended flat with positive bias which opened with mild gap up tracking the positive Asian cues. Indices continued to trade with moderate gains on the back of buying seen in Metal and Capital Good sector but it was off the track on account of selling pressure seen in select stocks in FMCG, Pharma and cement. Profit-booking at higher levels saw the index pare gains and move in a narrow range. Results season has been started with few companies posting results but big Daddy Infosys, is due on Friday is most awaited to give direction. We believe nothing much is likely to change as clearly the guidance will not be bullish. Asian markets traded higher while European markets trading in green.

Sensex ended a point higher. It was supported by gains in Hindalco (+4.77%), Tata Steel (+3.42%), Bharati Airtel (+1.56%) and BHEL (+1.20%). Restricting the gains were Ranbaxy (-4.02%), Dr. Reddy?s (-2.81%), Gujarat Ambuja (-2.29%) and ACC (-1.88%).

Welspun Gujarat Stahl Rohren Ltd (WGSRL) has planned to bid for pipeline projects in Saudi Arabia, Iran and Indonesia. The company shall also approach oil and gas companies in the Middle East, North America and Asia. The metal pipes manufacturer is also likely to bag more orders from the US. Middle East, Qatar and Iran have the largest gas reserves in the world and are planning to develop them commercially. Even, Saudi Arabia has lined up mega projects of $45 billion to increase oil production, build petrochemicals complex and new pipelines. Welspun Gujarat will get many opportunities to encash huge profits from countries like Brazil, Indonesia, China and India, which have plans to build gas pipelines. Russia is also planning to build gas pipelines to supply China with natural gas. Welspun's SAW pipe sales have grown at a CAGR of 37% over FY03-06. In the past, Welspun has supplied pipes to oil and gas majors like British Gas, Exxon Mobil, and Shell. Welspun Gujarat ended up by 10% while its peer Jindal Stainless closed marginally up 1%.

Mastek announced third quarter results which reported net profit of Rs 23.8 cr (Rs 238 mn) in the third quarter vs Rs 21.8 cr (Rs 218 mn) in the previous quarter a growth of 9.17%. Its total income was up 2.38% to Rs 214.8 cr (Rs 2.14 bn) from Rs 209.8 cr (Rs 2.09 bn). The company's US operation has gone up by 27% QoQ. The stock closed marginally down by 1% on the general downtrend.

iGATE Global Solutions reported revenue of Rs 805.1 crore for the year ended March 2007 as against Rs 635.8 crore in the previous year. Net profit for FY07 increased to Rs 49.8 crore, a sharp spurt of 805.5% from Rs 5.50 crore in FY06. For the fourth quarter ended March 2007, the company?s revenues increased 25.50% to Rs 210.1 crore compared to Rs 167.4 crore in the corresponding quarter previous year. While net profit for Q4 FY07 surged 381% to Rs 22.6 crore from Rs 4.7 crore in Q4 FY06. However, operating revenue for the 4th quarter was adversely impacted by 2.1% due to the strengthening of the rupee against the US Dollar. But the overall Margins have not been impacted due hedging. During the recently concluded quarter, iGATE added six new clients largely for IT services. The stock ended down by 4.6% on indications that next quarter would be sluggish.

Technically Speaking: Market witnessed a Yoyo session to end in flat. Sensex is still stuck and finding it tough to move over the band of 13200-13400, which a very crucial range. Bull power will be clearly evident if this level is crossed. On the lower side, support is at 12940. Market turnover stood at Rs 3847 cr. Overall breadth was in favor of Advances as advancers were 1548 against decliners of 1027.

Close: Markets take a breather !

Sluggish trading for the day after a strong opening summarises market action. Markets were choppy with every progressive hour as selling conitnued which pushed Indices to trade in negative territory. Fresh buying helped indian indices to recovery earlier losses made in the day. Sliding crude prices fuelled the rally in Energy stocks which closed up. Selective small and mid caps were in demand as investors to book profits. Japan has kept interest rates unchanged. The European indices were supportive after starting in green and continued to trade in the positive territory.

Sensex closed up 5 points at 13182. It was helped up by gains in HDFC (1615,+4 percent), ITC (159.80,+2.8 percent), HLL (209.,+2.6 percent), Tata Motors (718.50+2 percent) and HDFC Bank (992.05,+2 percent). Restricting the gains were Satyam (445.80,-3.5 percent), Wipro (547,-2.6 percent), Infosys (2000,-2 percent), Dr Reddy (716,-1.8 percent) and L&T (1573,-1.5 percent)

Tata motors plans to distribute its trucks through the Italian company Iveco's worldwide distribution network. Tata trucks including the highly successful one tonne Ace will be available through Iveco's sales network in markets like Brazil, Argentina, Russia and other markets where the Indian manufacturer has no significant presence. Tata will also get to use Iveco's established service network in these markets. In return, Iveco will bring its highly successful range of light commercial vehicles and market them through Tata's domestic network. These vehicles are likely to be assembled in the country, though plans have not been firmed up yet. Iveco will also be an engine supplier for the higher end models that Tatas are planning to launch in the next few years.

Educomp Solutions was in demand as the company not only acquired 76% stake in ThreeBrix E-Services Pvt Ltd which owns "The Learning Hour" tutoring service but also bagged an order from Govt of Haryana, for imparting CAL Programme in 716 Govt. Senior Secondary Schools in State of Haryana. The total order size is of Rs 18.30 Crores and over a period of 3 years. The story is interesting here we have a detailed note here. Educomp opened up to get locked up in circuit before closing 4% up. we also have our Wow cals on Educomp which has so far delivered 20% gains in just two weeks.

Bajaj was down by a percent after it announced a reduction in price by Rs. 3000 on its Platina model. Bajaj Platina will now be available at Rs 33,000 (ex-showroom). The price cut was announced by the company after it inaugurated its plant in Uttarakhand yesterday which has the capacity to manufacture a million bikes. Company intends to take on its arch rival Hero Honda head on by reducing the price. Competition is increasing in this segment. Hero Honda and TVS will also start production in the excise free zones and they will cut prices too. We wonder why Bajaj has guided for 10% growth this year.

Technically Speaking: Market churned Rs 4,185 cr. Sensex faces resistance at 13,200-13,400 range which was a major selling area for the bears in the last 2 months. Immediate support lies at 13075 below which the bears are likely to dominate upto 12,825 levels. Overall breadth favored Advances.

Market Close: some profit taking in lacklustre trades

Jittery investors sentiments saw profit booking in the indicies after a very strong week where Sensex made the highest gains ever. There markets were lacklustre ahead of the Investors were also in a holiday mood as well as cautious ahead of F&O expiry. Market lost its ground in mid-day trade under selling pressure across index heavyweights which continued to slip southwards. Adding to this fall was the weakness in Dollar as the Rupee surged to a 20-month high. High crude oil prices also weighed on the bourses. Selling pressure was witnessed in selective stocks of Auto, Software and Airlines, while Cement and Telecom sector were in investors favour. Asian Markets managed to trade in green before closing, while Europe trading in mixed.

Sensex closed down by 162 points at 13124.32. Weighing on the Sensex were losses in Tata Motors (753.85,-5 percent), HDFC Bk (982,-3 percent), Wipro (584.8,-3 percent), Maruti (818.9,-2 percent) and TCS (1261.25,-2 percent). Losses were restricted by gains in Satyam (472.25,+2 percent), ONGC (853.2,+1 percent), TISCO (441.9,+1 percent), RCVL (426.3,+0 percent). Volumes were low as they were expected to be. However FNO expiry for March and the year end date accounting may bring in high volumes for the rest of he week.

Glenmark Pharmaceuticals inched a deal to buy more than 90% of the Czech firm Medicamenta. Glenmark joins bigger Indian rivals such as Dr. Reddy's and Ranbaxy in trying to expand into Europe's growing generics market. This acquisition provides Glenmark with a strategic entry point into two of the fastest-growing and attractive markets in Europe. Glenmark also expects Medicamenta to provide a base for its branded products in Europe and will also look to develop and expand Medicamenta's current portfolio. Medicamenta, with marketing operations in Czech Republic and Slovakia is expecting its revenues to touch US$ 8 m in 2007. Pharma sector traded firm with Glenmark Pharma (up 6%) and Pfizer (up 4%) being the key gainers.

Sugar sector was back in demand today on government's decision to give incentives to companies that export the sweetener giving some cushion. The government would give a subsidy of as much as Rs 1,450 a tonne to sugar exporters while an incentive of Rs 440 a tonne will be provided on the export of raw sugar and will also consider creating buffer stocks of 20 lakh tonnes for two years in view of the high production of 250 lakh tonnes estimated this year. Market observed the incentives offer and expected to give a boost to sugar sector and the subsidy will provide a cushion to sugar makers. Bajaj Hindustan, Balrampur Chini closed up by 4%, while Sakthi sugars and Renuka sugars were the other major gainers.

Imported liquor might see scrapping of additional customs duty on wines and spirits. Currently there is a basic customs duty of 100-150 per cent and an additional customs duty (ACD) of 25-150 per cent on wines and spirits. The total incidence of tax is between 250-550 per cent depending on the import price of products. If the bill is passed then the imported liquor will be really cheap that will slow down smuggling. Though this is negative prima facie for United Sprits, and Radico Khaitain but the Indian system of distribution within states is so controlled that benefits of this will only accrue to existing players given that they understand the system. The foreign brands in any case dont have such a mass following we believe. However even Champagne could do the imports and benefit from the same though really it could slow the growth of its own brands which is key. There was little action here though.

Technically Speaking: It was a volatile morning but Sensex then after making an intraday high of 13330 kept its nose pointed downwards. Sensex is in a correction mode, after a big spurt last week. Supports were seen at 12950 and 12905 and Resistance at 13286- 13428 levels. Key positive would be with Sensex breaking out of 13520 levels. With the Derivatives expiry nearing in, markets likely to see some volatility before it can break above those levels. Market turnover stood at Rs 3126 cr. Market breadth was in favor of Decliners as; Advances were 849 against Decliners of 1746.

Weekly Close: Highest weekly gains ever !

It was the best week ever for the markets in absolute terms with gains of 6.85% which is a gain of almost 850 points. Such high gains in a week have been registered for the first time ever. Out of the 5 days in the week, market saw gains in the last 4 sessions.

It was a mild start for the week with decent gains but volumes were very muted without conviction. However then a strong bounce in the US had the Indian Markets rallying and that accompanied with some decent volumes.

China Central bank, People's Bank of China (PBOC) raised lending and deposit rates by 0.27 percentage point last week end. The benchmark one-year lending rate was increased to 6.39 % while the deposit rate was set at 2.79 %. Apparently this was to balance growth, stabilise prices and improve the overall structure of the economy. China has been seeing major growth even in a tightening environment. This sets the stage for slower growth. We expected metals / crude to see softness on the back of this. They softened only to make a comeback later.

Inflation last week was 6.46% and this week too the number did not change. We expected the banks to be weak but they rallied. The Banks were the big gainers this week which really remains a surprise. Markets are smart and they realised that this is a temporary phenomenon and probably that brought in the big buying. Inflation remains a bit of a worry in a sense . The rupee was strong this week and touched a low of 43.45 before closing at 43.75. The benefit of that is to an extent due to the inflation and may be thats the reason the RBI has been quite sanguine about it. The software stocks were a bit cautious on this and hence the gains in the large caps softwares were a bit muted.

The gains were across board and the major gainers of the Nifty were Bharti Airtel +8%, BHEL 16%, Cipla 8%, Dabur 9.8%, HDFC 5.4%; HLL 12%; ICICI 10%, Jet 11%, Larsen 12%, Mahindra 7%, Maruti 7%, ONGC 10%, Oriental Bank +16%, PNB + 15%, Rel com +13%, Satyam +6%; SBI 13%; Sail 9%, VSNL 9%. Among the losers were ITC and Tata Power but marginally.

We had a research note on Blue star. The company is into central Airconditioning. We believe that the stock is extremely expensive. The Markets seem to be expecting much stronger growth than they can deliver. At 34 times FY07 we are not convinced on the valuations. Look for lower levels but over the long term things could get better.

It was not a very positive week for cement though hopes were high. The Cement manufacturers met the FM this week but met with little success and the issue of high cement prices still remains hanging. The FM requested the Manufacturers to control the prices and has asked for proposals for the same. We were hoping for a rollback by the FM and thats not happened. However this has brought in some level of discomfort as long as inflation numbers come in high. We believe all this will be forgotten once inflation numbers start coming lower.

ITC was on the receiving end with West Bengal applying 12% Vat on tobacco products and then followed by Maharashtra. This is a hit below the belt for the cigarrette major. Cigarettes account for 60% of revenues and about 80% of profits. ITC will thus diversify less as cashflows are expected to be impacted badly and the plans for expansions in soaps and FMCG products have been put on the backburner. This was seen as a positive for HLL.. ITC lost 1% this week where as HLL gained 12%.

We had a research note on ICRA the second largest Rating agency in India. Moodys is the dominant shareholder here. Sebi norms on IPO grading gave the ICRA IPO a boost in the arm. This brings in another set of grading. So when a company has to raise money either through equity of debt, the rating agencies will get business. ICRA IPO is valued at 18 X FY07 earnings. Important to understand that the business is completely dependent on the macro environment. However its a good service business with annuities. We believe the pricing has been kept low so as to benefit the Employee trust. The big fallout of this IPO would be that the employees could be offered an incentive package. Thats good news. We thing its a good idea to subscribe to the issue. In the current environment where most IPOs have listed below offer price, there is hope of getting what one bids for.



Technically speaking: We maintained that Sensex supports were placed at 12300- 12400 and the resistance was at 13000 and above that around 13300- 13400. Thats where the Sensex has taken resistance. We are near the upper end of the range. Expect Markets to have some level of reversal from here. and supports are around 13000 before the next direction. 13520 is the next resistance level to be crossed with targets of 13804. Clearly the negative trend will be negated above 13520.

Next week is the FNO expiry for March and that should bring in some volatility. Also we are near the year end and some level of NAV propping is a possibility. Volumes are low and the liquiidity will be limited. So its likely to be a lacklustre week.

Market Close: A huge rush as global woes wane !

It was a strong trading day and the fourth day at a stretch. Heavyweights supported the rally. Sustained buying in Sensex majors kept the momentum in the market. This was on the back of strong US markets rally overnight and a spillover effect of short covering. Global markets rallied on the back of no rate hike by the US Fed.

The FM meeting with cement companies had nothing to support cement stocks. Pharma, Software however helped the gains. Mid and small caps did not find many takers. Power sector stocks saw strong gains. The 123 agreement for the Nuclear deal with the US is around the corner and that helped fuel in interest.

Sensex ended up by 362 points at 13308.03 helped up by gains in BHEL (2230.05,+6 percent), HDFC Bk (1023.25,+6 percent), Maruti (831.1,+5 percent), ONGC (852.25,+5 percent) and SBI (1028.5,+5 percent). Restricting the gains are Grasim (2080.8999,-1 percent).

Volumes were higher than the last three days but still not enough to match up to a month ago. The volumes were around Rs 3500 cr still considered low given the fact that next week is FNO settlement for March.

As per a leading business daily, the country's ten largest banks have indicated to the RBI that the continued tightness in liquidity might compel them to slow down credit growth substantially in FY08. This outlook was manifested in the fact that the overnight call money rates rose to a decade's high of 75% last week, before closing at 40%. These highs follow the demand for funds to meet advance tax payments, government bond auctions and the impact of increases in the cash reserve ratio (CRR). To ease liquidity exigencies at some banks, the RBI has allowed banks with excess investment in government bonds (SLR) to borrow from it through the repo route. Although the RBI has been targeting a credit growth of 20% for FY07, the same has sustained at 29% yoy until February 2007. The major gainers in PSU Banks are Bank of India 10%, Canara Bank and PNB closed up by 7.38%.

TRAI's announcement of a reduction in Access Deficit Charges (ADC), which were paid by these service providers to BSNL for funding rural telephony. The total amount of ADC for 2007-08 has been reduced to Rs 2000 crore from the existing level of Rs 3200 crore. This is a big benefit for VSNL, ADC on outgoing international long distance calls has been reduced to zero from existing level of 80 paise per minute and ADC on incoming international long distance calls has been reduced to Re 1 per minute from existing Rs 1.60 per minute. The TRAI has also reduced the ADC on percentage revenue share on domestic calls to 0.75% from existing 1.50% of Adjusted Gross Revenue (AGR) of all service providers. The reduced ADC should see tariffs come down for both domestic and international calls making mobile phones all the more affordable. The move to reduce the ADC is in keeping with TRAI's earlier proposal (in February 2006) of phasing out the ADC by 2008-09 or merging it with the USO (Universal Service Obligation). The major gainers were VSNL and R Com. VSNL closed up by 10% and R Com ended up by 4%.

VSNL rallied on the news on the sale of its land bank of 773 acres through an open market sale. The plan may not require cabinet approval as it is in line with the existing shareholders? and share purchase agreements between the government and VSNL. The intention of the move is to bridge the estimated revenue deficit of Rs 71,478 crore for 2007-08. Govt. is expected to take 50% (estimated Rs. 5,000 cr) of the proceeds generated through the sale of land. VSNL has a surplus and of 773 acres out of which major chunk of 524 acres is in Pune while 128 acres is located in Delhi. The remaining land is located in Kolkata (35 acres) and Chennai (86 acres). Valuation expected is large.

Technically Speaking: It was a Bull session for the whole day. Sensex touched intraday high of 13326 and low of 13071. Sensex has closed near the resistance zone of 13350-13400. A close above these levels will take Sensex back into bull orbit. With the expiry nearing in, likely to see some volatility before we break above those levels. Support lies at 13146-12986. Market turnover stood at Rs 3555 cr. Market breadth was in favor of Advances, in the ratio of 1.6:1.

Market Close: third day of upmove in low turnover !

Sensex had a nervous morning. As the sessions progressed cautious buyers were seen across sectors. Global cues did not hold out much as markets continued to waver between positive sentiment and negative. Indices traded ranged initially but then the direction was only one lead by banking. Banking stocks were on a roll in the last hour as renewed buying interest was seen after the government said the current cash squeeze in the system would ease in the next few days. Mid and Small caps did not do as well and the move was largely lead by index heavyweights. Most Asian markets closed in the green while the European indices were also trading in green.

Rupee hit a new high of Rs. 43.48 vs the Dollar. Everyone is waiting for the RBI to intervene. A strong rupee is good for the software firms. Volumes on the bourses have drastically dropped over the past few days, largely as the conviction is lacking. Volatility is expected to increase with expected expiry of derivatives next week.

For the first time in history, the government's net direct tax collections have crossed the figure of Rs 2,00,000 crore. Net direct tax collections were Rs 2,05,000 crore as reported on the Online Tax Accounting System. The net direct tax collections are expected to be Rs 2,25,000 crore till March 15 this fiscal. The final figure will be out in a couple of days after all the data are processed online. This is really good news.

Sensex closed up by 240 points at 12945.88. It was helped up by gains in ICICI Bk (870.35,+6 percent), HLL (190.75,+4 percent), Bharti Tele (761.75,+3 percent), Rel Energy (491.1,+3 percent) and SBI (982.15,+3 percent). Restricting the gains were Guj Ambuja (106.45,-4 percent), HDFC (1543.4,-1 percent), Ranbaxy (332.2,-1 percent), Grasim (2105.8,-1 percent).

Nestle India reported its results for the December quarter registering a growth of 18% YoY in its topline as compared to the same period last year. The company's bottomline however declined by 2.8% YoY excluding the extraordinary items. The fall in bottom line is a result of increased provisioning for contingencies that has been made for two years during the December quarter. For CY06, the company reported a growth in its topline of 24% YoY and a bottomline growth of 2% YoY. The topline has grown mainly on the back of increased volumes and price hikes during the year. Nestle India also said that the profits for the quarter and year ended December 2006 were adversely impacted by a steep increase in prices of commodities, higher operating costs associated with upgraded formulations and manufacturing processes of the infant nutrition products. The stock ended flat, while its peers Britannia (down 2%) and Tata Tea (down 1%) ended negative.

Telecoms counter were active post the regulating body TRAI slashed ADC (Access Deficit Charges) rates. ADC rates slashed to Rs. 2,000 cr from Rs. 3,200 cr by TRAI. The Amendment is to come in affect from April1. As a result of that per min ADC reduced to zero from Rs. 0.80 per min on al out going ILD (International Long Distance Calls) and Rs. 1 from Rs.1.60 per min on incoming ILD. The major gainers due to this amendment are Rcom, Tata Tele services, Bharati Airtel which closed higher.

Reliance Energy surged almost 3% on reports that the company was pursuing tie-ups with US companies. The company plans to get into the nuclear energy market. The Indo-US civil nuclear deal calls for massive investment as India can add up to 20,000 - 40,000 Mw of nuclear generation capacity, which Reliance Energy does not want to miss out on. Apart from nuclear energy, the company also came out with aggressive growth plans for wind energy. Besides this news there was also another reason for the surge as the company has reportedly bagged a contract for developing the Trichy - Dindigul National Highway four-laning project to be undertaken on a build-operate-transeferr (BOT) basis.

Technically Speaking: Markets traded weak in the initial sessions but bounced back later in the day. Sensex touched intraday high of 12964 and low of 12664. Market turnover was low at Rs 2716 cr. Overall breadth was in favor of Decliners, where the Advancers were 1154 to Decliners of 1391. Sensex has closed very near its resistance of 12970. If the sensex fails to cross above this in the recent rally then we might head back to 12300 and there is are crucial sessions ahead.

Close: Flame of hopes cooled by waves of selling !

Post the deep fall yesterday, Indian markets started off strong on the back of global stability and traded ranged in green but ended on a flat note. At the previous trading hour indices consolidated the gains which posted earlier. Profit booing seen in index heavy weights and sectors like Automobile, Banks, Engineering, FMCG, Energy and PSU. Some of the companies have declared the advance tax numbers which seems to be good, expect the market to bounce back. But the worry is inflation, expected to be around 6.20%-6.30% for this week. That?s not particularly good; this will be a constant worry for the markets. Asian Markets ended in green, European Markets currently trading strong.

Quarter 4 Advance Tax numbers: SBI Rs 690 cr vs Rs 1036 cr (yoy), ACC Rs 160 cr vs Rs 50 cr (yoy), Century Tex Rs 24 cr vs Rs 30 cr (yoy), Hindalco Rs 265 cr vs Rs 171 cr (yoy), Grasim Rs 200 cr vs Rs 105 cr (yoy).

Sensex closed up by 14 points at 12543.85. It is helped up by gains in Dr Reddys (674.9,+4 percent), ITC (147.35,+3 percent), Infosys (2078.2,+3 percent), Hindalco (130.65,+2 percent) and TCS (1236.2,+2 percent). Restricting the gains are SBI (921.9,-3 percent), HDFC (1513.55,-3 percent), Tata Motors (725.85,-3 percent), ACC (731.65,-2 percent) and RCVL (390.65,-2 percent)

French nuclear reactor maker Areva has raised its offer for REpower to 140 euros per share after seizing more than 30% of the German wind-turbine maker for which a bid has also been placed by Indian wind turbine maker Suzlon Energy. Areva announced it and agreed to acquire additional shares of REpower Systems AG for a purchase price of 140 euros per REpower share. The move comes after REpower recommended an offer worth 126 euros per share from Suzlon which had in turn trumped a previous offer from Areva worth 105 euros. This is a big negative for Suzlon, because this means Suzlon will continue to bid higher and this bid is important for Suzlon.

The Metal stocks ended in green. The JSW group plans to diversify from its metals business into manufacture and marketing of cement. This marks the second recent diversification for the Jindal group. The mine to metals group is examining the feasibility of setting up a cement plant at a cost of Rs130 cr at its steel facility in the Bellary district of Karnataka. The move to diversify into cement in addition to mining and metals, ports and industrial gases is an attempt by the Jindals to capitalize on the growth of the core and manufacturing sectors in an economy growing at more than 9% per annum. The cement foray will also allow the group to utilize a by product of steel making slag, which comprises impurities that are removed while converting ore to steel in furnaces. With the proposed expansion of its steel plant, the company will be producing more slag. This waste product is currently sold at Rs 250 per tonne to other cement makers in the area. With more slag available in the future, the company wants to use it to manufacture a higher value added product to boost its margins and revenues. JSW Steel has been in a massive expansion phase having outlined plans to invest Rs 620 cr over the next couple of years for a variety of projects. JSW ended marginally up and its peer Tata Steel ended marginally up, SAIL ended up 2.38%.

Energy stocks ended in mix for the day. ONGC is planning to enter into a comprehensive technical collaboration deal with British Petroleum (BP) for deepwater exploration blocks held by the latter. BP has also offered its expertise to ONGC for jointly undertaking the exploration and development of the coal bed methane (CBM) blocks held by ONGC. BP will help ONGC develop an understanding of the likely potential for exploring deepwater blocks by re-processing its seismic and well data. Any future commercial participation will be based on the results of this study. Following the joint study and subject to government approval, BP and ONGC will jointly develop and explore the GK-DW-1 block in the Kutch basin where the two have already chalked out a work programme. The deal highlights the fact that ONGC lacks sufficient expertise in the exploration of the deep-water blocks. However, with BP's collaboration the exploration and development activity will speed-up for ONGC. The stock ended marginally down and its peer RIL also closed marginally down.

Technically Speaking: It was a ranged session for the whole day before closing. Sensex touched intraday high of 12789 and low of 12510. Sensex is moving in a range of 12900 and 12500. A breakout on either side could give a big move. Resistance lies at 12714, 12891. Support at 12435, 12333. Market turnover stood at Rs 3824 cr. Overall breadth was in favor of Advancers where the Advancers stood at 1458, Decliners stood at 1112.

Close: Now its the US Housing market which added to the woes !

Markets went into a tailspin after bloodshed seen in US markets which had the Asian markets mauled. Markets across the globe cracked due to concerns the delinquencies reported in the US mortgage market. Asia reflected the pessimism too Market traded in deep red and the movement was restricted to a relatively narrow band. There was some level of recovery from lower levels but the recovery proved short lived. Investors cautiously traded as they wanted to play safe. Selling pressure was not just restricted to frontline stocks but was also to the Mid and Small caps. IT, Telecom and Banking stocks were out of favour while some buying was seen in Cement and Auto stocks. European markets traded weak.

Sensex closed down 453 points at 12529.62. Weighing on the Sensex were losses in ICICI Bk (829.7,-5 percent), Bharti Tele (729.05,-5 percent), Wipro (555.25,-5 percent), RCVL (398.55,-4 percent) and Satyam (432.7,-4 percent). Losses were restricted by gains in Bajaj Auto (2529.3,+0 percent) and Guj Ambuja (106.15,+0 percent).

MindTree Consulting spurted in late session. The stock was up almost by 15% to Rs 1005. Volumes in the scrip were a huge 90.1 lakh shares on BSE. The stock was also the most active counter with a turnover of almost Rs 824 crore. Mindtree has spurted on high volumes in the past three days. MindTree made an impressive debut when it got listed at Rs 599 on BSE on 7 March 2007 with a premium of 40.9% over the IPO price of Rs 425. The stock finally ended up by 5.5%. Promoted by ex CEO of Wipro, Mr. Ashok Soota, the company has certainly done well and expectations are high.

Low cost Airlines got a relief with civil aviation minister Mr. Praful Patel rolling back the ministry's proposal to hike peak hour airport charges. This is negative for Jet airways which was looking for a differentiation for its services. Still there is something to cheer here in a sense but really we still avoid the sector though falling crude could bring in positive surprises. Jet airways and Deccan Aviation both ended down by almost 2%.

The latest data showed that the infrastructure sector output grew by 8.7% in January 2007 from a year earlier, marginally higher than a revised 8.5% in December 2006. Infrastructure output in the April 2006-January 2007 period rose by 8.4% from a year earlier, despite a slowdown in production of crucial construction material cement as well as finished steel and coal. The data was certainly encouraging but didn't help much today as investors are more worried on the global issues.

Technically Speaking: Markets opened with a gap down of almost 280 points. Sensex started at 12694 levels today which was incidentally the intraday high and made a low of 12504. Volumes were decent at Rs. 4308 cr. Overall breadth was in favor of Decliners, where the Advance to Decliners ratio stood at 1:3. Sensex is now moving in a channel and 12470 levels becomes an important support for it. Breaking this would lead to levels of 12350 near the 200 DMA. However upsides will see resistance between 12970 - 13040 levels. This is 3rd gap down in last 1 month and may be tough to sustain. Sensex is just near the support and a bounce near term may be on cards. Do have a look at the technical chart on our website for BSE Sensex.

Close: Bounce back on global cues !

Markets started off strong at the start of the trading session on the back of a strongly positive Asia and the fact that investors felt that the selling had been overdone. However it was a volartile session as Sensex gave up almost all of its 300 points gain by mid day only to see value buying in the later part of the session. 'Volatile' is how one would describe the markets. Buying was witnessed in the IT counters on talks that the Fringe Benefit Tax on ESOP's could be done away with. The chances of removal are not very strong taking into consideration the reason for which it was implemented by the Finance Minister in the recent union Budget though the size of this tax could be a small one where information is yet awaited. Buying was also seen in mid caps along with Cement stocks at lower levels. It was on the global front that the performance was extremely supportive as the Asian Indices ended in dreen and the European ones too saw strength right from the word go.

Ashok Leyland was also in demand after its sales numbers. There were talks that it was a likely winner for Punjab Tractor Ltd. The Stock ended up by 5%. Jet continued to trade at higher prices to end up by 3% after there was a change in Govt Policy regarding Air Port charges. The change in the policy gave full Service Providers like Jet a competitive against Low cost airlines that were giving them tough competition from the pricing point of view.

Sensex closed up by 282 points to end at 12697.09. It was helped up by gains in Wipro (580.75,+8 percent), Infosys (2116.3,+5 percent), ACC (854.4,+5 percent), Satyam (433.95,+5 percent) and Bharti Tele (718.45,+4 percent). Restricting the gains were Hindalco (130.1,-3 percent), NTPC (133.1,-3 percent), Hero Honda (666.85,-3 percent), Tata Motors (726.3,-1 percent) and HLL (171.4,-1 percent).

Bharat Petroleum Corporation Ltd (BPCL) ended up by 5% after it announced its plans to start an oil-trading arm in Singapore, in an effort to become a price maker and to capture export markets as it boosts refining capacity. Currently, the Indian refining capacity of 135 m metric tonne (MMT) is outstripping domestic demand by around 20-25 MMT, thus leading to increasing exports by Indian companies.

There was not much impact on Indian Oil Corporatrion (IOC) after there was a fire reported in its refinery in Assam. Refinery which has the capacity to process 20,000 barrels of crude per day is expected to be shut for 3-4 days. More information on this issue is expected from the company by late Tuesday. Despite that Stock was up by almost a percent for the day. All the oil refiners were helped by the fact that crude slipped from $ 62 / barrel levels to under $ 60 / barrel. We continue to avoid these politically sensitive stocks.

Technically Speaking: Decline outnumbered the Advances for the day as there were 1465 declines against 1105 advances. Trading session generated a volume of Rs. 3,807 cr. Resistance for the day ranged between 12858-12976 levels while support was at 12525-12309 levels. Sensex has closed at day high. We might open higher tomorrow, which could again attract selling. Need to watch the levels of 12840 and 13250 on the higher side, whereas 12450 and 12300 are key levels as supports.

Market Close: the fall continues...

Global mayhem continued as market opened the day on a weaker note. Major backdrop was from the Asian markets as Hang Seng (-4%) & Nikkei (-3.3%) hit the investors sentiments as the Indian indices traded in red. Investors have been nervously sitting on higher worries about the global weakness which hit the markets hard. As every hour of trade passed by, weakness was seen across the board as selling activity intensified and index heavyweights showed no signs of coming up. Midcaps and Small caps were also under selling pressure as it plunged by 5% and 5.6% respectively. There was clear one way direction in the trading sessions as the market was headed southward with little recovery made at the end as buying was seen at lower levels. All BSE sectoral indices ended negative with many of them going down by almost 3%.

The main reason for global gloominess is that the Yen has strengthened against major currencies and hitting a three-month high against the Dollar which made edgy investors unloaded risky carry trades. The Nikkei average fell 3.34% marking its biggest one-day tumble in nine months and a new low for 2007, as investors continued to dump shares in exporting companies following the Yen's rise. The Hong Kong?s Hang Seng Index tumbled 777.13 (4%). Taiwan market was also down by almost 3.74% as the provisional figures of FII being sellers of almost $591 mn. Asian Indices ended in Red while the European markets were trading with sharp losses.

Sensex ended down 471 points at 12415.09. Weighing on the Sensex are losses in Ranbaxy (320.1,-7.86 percent), Maruti (770,-7.67 percent), Wipro (532, -7.19 percent), Dr Reddys (618,-6.45 percent) and Tata Steel (416.8,-5.95 percent). Losses are restricted by gains in Guj Ambuja (111,+1.28 percent), Grasim (2100,+0.08 percent), .

Major steel producers have rolled back the recent price hike of TMT bars and galvanised steel, while the hike was lower by 50% in case of HR coils. The price of HR coils which was earlier increased by Rs 1,000 per tonne has now been reduced to Rs 500 per tonne. The move is on the back of the government's request to curb inflation. Steel producers had earlier hiked prices in the beginning of the month as a routine activity based on demand and supply factors. Stocks in steel sector ended in red with major losses to SAIL as it ended down by 9%.

ACC slipped by almost 5% after its February shipments fell 7.2% to 1.42 million tonnes year-on-year basis. The production in February 2007 declined to 1.45 million tonnes, down from 1.54 million tonnes in February 2006. Production was hurt due to technical modifications at three of its plants.

Titan industry plans to make UAE as its major export hub. Company also plans to use UAE as its base to reach various overseas markets. Company is well placed in the Indian market with Tanishq accounting for almost 45% of the branded Jewellery market. This branded jewellery market still is very minuscule accounting for less than 4%. Exports contribute 6% of the revenues at present. However key is the Indian Market itself and probably Indians settled abroad who would find comfort in the brand for now. We are positive on the business. The stock ended down by 6%.

ICICI Bank has decided to consider transfer of investments in four subsidiaries in insurance and mutual fund businesses to a wholly-owned subsidiary, which also may lead to the eventual listing of the holding company. ICICI Bank reported that investments in the four subsidiaries may be transferred to ICICI Holdings, the new subsidiary to be formed. ICICI Bank also plans to transfer its investments in ICICI Prudential Life Insurance Co., ICICI Lombard General Insurance, Prudential ICICI Asset Management Co. and Prudential ICICI Trust to ICICI Holdings. ICICI Holdings will consider a public listing of shares by December 2007, to meet a part of its capital requirements for its insurance ventures. However, ICICI Bank intends to retain its majority ownership in the new company. This is value unlocking. These holdings were valued at Rs 200 per share.

Technically Speaking: Markets traded weak as it headed for a southward direction. Sensex touched intraday high of 12716 and low of 12344. Market turnover stood at Rs 3989 cr. Overall breadth was in favor of Decliners, where the Advance to Decliners ratio stood at 1:11. Sensex has formed a running gap pattern. If we fail to cover today's gap in the coming few days, then the speed of fall could increase. Supports for sensex lies at 12300, 11900 and 11460. Resistance is seen at 12800.

Close: Global meltdown and Budget blues

Market started on the backfoot given the global meltdown triggered by China. Chinese stock market hit down 10% yesterday and that started the meltdown in US and spread to all of Asia. Global markets have been hitting highs and there seems to be some profit taking spreading across the globe. Investors in India have been jittery sitting on high valuations and worries about the global meltdown hit markets hard.

It was not only the Global markets. In such a situation most good news is ignored and bad news gets amplified. The cement stocks were shot by a double barrel excise gun by the FM and IT was put on the Mat quite literally. The construction companies got a shock of their lives as a tax rule was set to be implemented from retrospective effect. ACC, Ambuja, Infosys, Wipro, TCS, Nagarjuna Construction, HCC, IVRCL hit dirt on the back of this. ITC saw gains surprisingly as there was no VAT suggested and only a 5% increase in excise duty. All in all there was no boost to growth in any way and the spend on Infrastructure was talk as always. Education got some thrust and Irrigation plans seemed to offer some hope for future. A non event it was expected to be and thats what it turned out as a missed opportunity. However the positive takeaway was that Long term Capital Gains has not been introduced and thats what the market feared. Service tax also has been kept steady.

Sensex closed down over 541 points down at 12938. There was only one positive in the Sensex and that was ITC. Rest all saw a meltdown. Satyam down 8% at 412; Gujarat Ambuja down 8% to 116, ACC down 6% to 900, Wipro down 7% to 560 , HDFC down 6% at 1500 were the drags on the Sensex .

Sectors which lose out ; Cement, Construction, Cigarettes, IT, Petrochemicals, Mutual Funds

Cement has been imposed with a dual excise duty structure. Cement selling below Rs 190 per bag will face Rs 350 excise duty and above that will see excise duty at Rs 600 (earlier Rs 406). This implies that clearly Rs 10 per bag extra a big negative.

IT companies will now have to pay MAT (Minimum Alternative Tax) of 11.2% on Book profits. Also ESOPs to employees would fall under the FBT (fringe benefit tax). The STP benefits would not be extended beyond 2009 and thats the big negative.

Construction companies having availed of benefits under the section 80 I A for construction done in backward areas as contractors would now have to pay tax from earnings since year 2000 as these benefits have been disallowed to them from retrospective effect.

Dividend Distribution tax has been introduced for Mutual Funds as well and the rate overall has been increased from 12.5% to 15%. This is a big hit really. Mutual Fund industry will see slower growth. They were earlier competing with the Banks for consumers savings and this puts them at par really as dividend schemes would certainly find the going tough.

Import duty for PSF, POY and polyester intermediates PAT, MEG, DMT has been cut from 10% to 7.5%. Negative for Gail, Reliance and IPCL.. albeit only marginally.

Service tax introduced on Office Rentals and that means that costs for all commercial spaces would go up by 12.36%.

Sectors which find some positives : Refineries ; Textiles, Gas pipeline companies; Biscuits; Telecom

Refineries benefit from cut in excise duties on Petrol and diesel from 6-8% which means higher realisations by around 40 paise per litre. 4% CVD on Crude has been done away with as well.

The Textile sector has seen positives in the form of Textile Upgradation fund extended by 5 years and also the allocation increased. Textile parks allocation has been increased. Prices of man made fibre would be lower. The negative is that specified Textile machinery would see 8% excise duty against 0 earlier.

80IA benefit have been extended for cross country gas networks, pipeline projects and storage facilities which helps Gail, Reliance

Biscuits at less than Rs 50 / kg will see no excise. Positive for Britannia, Parle, ITC as it should help fight the unorganised sector. Benefits of food processing sector also in terms of lower duties on edible oil etc.

A committee to look into a lower licence fee regime for the Telecom sector... by and large that should happen. Thats a positive for the Telecom sector.

Technically Sensex took support at 12800 levels which was a gap support. Going ahead, Sensex is in a bit of oversold region.. though directionally its headed down. Supports are at 12720 and if thats gone the next big support would be at 12150. Resistance will now be seen at 13300.

Markets are a combination of valuation, sentiment and prospects. Clearly in the near term it loses out on perception of valuation and sentiment. Prospects continue to be bright. Is this an opportunity..Yes we believe but the opportunity will keep getting better as we move along.

Market Close: sell off for third session...but what next ?

Markets suffered yet another sell-off on back of CRR hike reported yesterday, with this effect banking stocks came under pressure and witnessed heavy selling. Selling was seen across the board but Auto and Banking had blood bath. The sessions were extremely volatile for the day. Market recovered at the closing session largely on back of gains in Cement and Telecom counter. Market is heading towards major events...first in line is F&O settlement followed by Budget. When inflation concern hangs around the economy and Budget is scheduled ahead investors prefer to play safe. The case is no different at present. The volumes were not exciting as it is always and conditions are expected to remain same till the inflation worry and Budget is over. Expect market to trade range and volatile ahead.

Sensex was down by 81 points at 14009. Weighing on the Sensex were losses in SBI (1101.25,-6 percent), HDFC Bk (1016.65,-5 percent), ICICI Bk (915,-4 percent), Maruti (857.4,-4 percent) and Grasim (2655.8501,-3 percent). Losses were restricted by gains in Hindalco (146.4,+3 percent), Bharti Tele (760.9,+3 percent), RCVL (451.3,+2 percent), Wipro (650.45,+2 percent) and ONGC (900.1,+2 percent).

Banking stocks ended in red. The hike in the cash reserve ratio by the Reserve Bank of India took its toll on Banking and other related stocks down. The hike will lead to increase in corporate loan rates, home loan rates, auto loans and rates for personal loans. The central bank said the cash reserve ratio will rise to 6 per cent from 5.5 per cent in two stages, the first on 17 February 2007 and the second on 3 March 2007, to rein in inflation and credit growth. Major loser were SBI (-6.2%), HDFC (-5%) and ICICI (-4%). However we feel that markets had already priced in a large part of the negatives from inflation in the last two days and hence there is a feeling that it may be the bottom of the fall already. However there are two issues which are of concern. Coming within 2 weeks from the credit policy where this could have been done. It leaves a taste that the RBIs feel on the economy was not right. Secondly the extent of the hike at 50 basis points really implies that a panic button has been pressed.

FMCG sector traded mixed. According to a leading business daily, unexpectedly heavy winter rains in India's wheat-growing states have raised hopes of a better harvest. As the government formally banned wheat exports for the rest of the year. Announcement of the ban was posted by the government on Wednesday. India, the world's second-largest wheat producer, exported no wheat last year after shortages forced it to import wheat for the first time in six years but did not declare a foreign sale ban. The jump in prices of essential goods, such as wheat, has been a significant factor in pushing India's inflation to a more than two-year high of 6.58 %. Wheat prices alone have risen by 11.74 % year-on-year. The cost-of-living has become a key issue for the Congress-led government, which is facing a slew of state elections this year. The government has called the wheat supply crunch as a temporary event and says there is no danger to the green revolution in which use of US hybrid seeds led to bigger yields and food independence for the world's second most populous nation. Until unless Government takes corrective measure to increase production, it is difficult to maintain the demand and supply curve. Britannia was the major gainer here today as Govt. announced ban on wheat exports. The wheat prices may not come down in near term but the Britannia and its compititor has reduced the size of the pack (keeping at same price) so as to offset the high wheat prices impact. We are positive on this one.

Technically Speaking: It was a volatile session for the whole day. Sensex touched intraday high of 14036 and low of 13805. Sensex has formed a hammer on the daily charts and Nifty futures have also closed in a high premium in recent times. All indicates that we are going for a pul back rally which could move up to 14400-14500. Volume was low at Rs 3998 cr. Overall breadth was in favor of Declines. The Resistance lies at 14113-14190 lies while Support at 13882-13728 levels.

Close : Consolidation process !

Market slipped into negative territory right from the word go. and continued to venture further in the negative territory with every progressing hour on selling pressures witnessed throughout the day. Sensex however ended marginally positive on the back of buying in selective Index Heavy weights. Profit taking was seen in Bajaj Auto and Hindalco who lead the yesterdays rally. There was not much support from Global front as the Asian Indices ended mixed while their European counter parts were in red. The positive is that ECB and Bank of England have both kept interest rates unchanged. ! But really this is largely expected and so markets have not taken any positive cue from the same.

Sensex is closed up by 9 points at 14652 helped up by gains in ICICI Bk (997.9,+2 percent), Maruti (963.15,+1 percent), Rel Energy (565.85,+1 percent), Ranbaxy (421.5,+1 percent) and RCVL (489,+1 percent). Restricting the gains were Hindalco (175,-4 percent), Bajaj Auto (3008.25,-2 percent), HLL (205.15,-1 percent), Hero Honda (726.2,-1 percent) and Wipro (634.95,-1 percent).

There were some concerns regarding Cement Sector in a report by CRISIL. CRISIL opined that the Cement demand is expected to grow, on an average, by 9-10 per cent each year over the next 3 years due to healthy activity in end-user segments like housing, infrastructure, commercial construction etc. According to CRISIL bright prospects in the industry had attracted players - large and small - enough to have them announce capacity expansions (either greenfield or brownfield). The announced expansion exceeds 90 million tonnes - approximately 55 per cent of the current industry size. While this expansion may not notably influence the demand-supply situation over the short term, with more capacities materialising, operating rates as well as prices in the country would be significantly affected. CRISIL research expects supply to grow by a CAGR of 11 per cent over the next 5 years, exceeding the growth in demand. This is expected to bring down operating rates all across the country. But we are positive on this sector. Valuations are at high levels and thats where we believe could bring in the profit taking on such a report. Taking profits in Cement may not be a bad idea with a trading perspective. We believe cement prices will head higher in the next 12 months. Corrections should offer an opportunity when they come.

Eveready rallied on news that Hindustan Zinc had cut prices by 8.3%. Zinc is now priced at Rs. 1,59,100 a ton against Rs. 1,73,500 a ton. Eveready had reported a loss which was mainly due to the rise in Zinc prices. Eveready stands to gain from lower prices. With a wow call on in Eveready the gains for our patrons has been good and will be good going ahead too. The Stock ended the day higher 5%.

Punjab Tractors which rallied yesterday on Mahindra and Mahindras bid saw more gains today as well. Escorts confirmed that they were bidding for a stake in the company. Other firms like Sonalika's International tractors and TAFE have also shown interest for a stake in the company. This provided enough fuel for the stock to rally as the stock ended the day higher by 11%. The acquirer would benefit from this acquisition as it would increase market share by 10% also enable it get a hold of a manufacturing facility in the potentially huge Northern market.

Technically Speaking : As expected we have reached our first target of 14,700 and witnessed some profit booking after hitting the target yet there seems to be good support at lower levels. Declines outnumbered the Advances for the day as there were 1043 advances against 1613 declines. Sensex ranged between an intra day high of 14,698 and low of 14,523. Volumes were pretty good at Rs. 4,466 cr. Levels to watch above 14,700 is 14,850. Do keep reading for more.

How Market Fared

Momentum likely to continue

Bulls today conquered new heights reversing yesterdays Loss. The frontline stocks were at the fore front lifting the benchmark Sensex over the 14600 level for the first time. The Auto index was the major gainer and others Bank, Metal and Technology index followed suit. The heavy weights like Infosys, ICICI Bank and ACC were among the major gainers, however Tata Motors, ONGC and HLL were among the major losers. Finally, the BSE benchmark Sensex surged 164 points to close at 14643. NSE Nifty advanced by 28 points at 4224.

Bajaj Auto today was the star performer, with the scrip gaining over 9% to Rs3078 being the top gainer among the 50-scrip’s of NSE Nifty it touched an intra-day high of Rs3093 and low of Rs2795.

Wipro advanced 1.2% to Rs642 as the company is looking at acquisitions in Healthcare, travel sectors. The scrip touched an intra-day high of Rs646 and a low of Rs631 and recorded volumes of over 5,00,000 shares on NSE.

Lupin advanced 2.3% to Rs630 after the company announced they got approval from US FDA for Sertraline Hydrochloride Tablets. The scrip touched an intra-day high of Rs645 and a low of Rs610 and recorded volumes of over 2,00,000 shares on NSE.

Subex Azure advanced 1.6% to Rs725 after the company announced their plans to raise $200mn selling GDRs, bonds. The scrip touched an intra-day high of Rs746 and a low of Rs680 and recorded volumes of over 29,000shares on NSE.

Telecom stocks today were a mixed bag. Heavy weight Bharti Airtel gained 0.3%o Rs772 and MTNL advanced 2.9%to Rs502. However, Reliance Communication lost 0.9%to Rs485 and MTNL was down 0.5% to Rs164.

After being on the receiving end for couple of trading session the Metal stocks today shined. Hindalco gained 4.3% to Rs182, SAIL surged 4.8% to Rs116, Nalco advanced 0.2% to Rs234 and Sterlite Industries gained 1.3% to Rs489.

FMCG stocks witnessed selling pressure towards the end. Mid-Cap stocks like McDowell fell 3.1% to Rs916, Tata Tea was down by 1.5% to Rs705 and Godrej Consumer slipped 0.5% to Rs150. however ITC and Dabur were among the major gainers

A new high lead by select heavy weights !

Market surpassed the previous higher levels to close at an all time high yet again amid mixed Global cues. Starting apprehensively, buying was witnessed through out the trading session. Bajaj was the star of the day on rumours of stock split. Really a stock split is of no significance and value should not increase by 8% but thats a BULL market for you. The rally was supported by Banking, Pharma and FMCG stocks while Automobile, Power, and cement stocks traded mixed.

Driven by robust performance in manufacturing and financial services, the country's gross domestic product (GDP) growth is projected at 9.2% during FY07, against 9% in the previous year. This is along expected lines and kind of discounted. The issue now is that interest rates are rising and whether the GDP growth can continue with the momentum that it has been growing in the current environment.

Sensex closed up 165 points at 14643 helped by gains in Bajaj Auto (3080.3,+9 percent), Hindalco (181.9,+4 percent), Infosys (2358.75,+4 percent), Grasim (2874.6001,+3 percent) and ICICI Bk (982.35,+3 percent). Restricting the gains were Tata Motors (902.05,-2 percent), ONGC (891.65,-2 percent), Guj Ambuja (141.2,-1 percent), HLL (207.5,-1 percent) and RCVL (485.75,-1 percent)

FIIs were buyers of Rs.656 cr yesterday in cash. FII interest seems to have reignited. Yesterdays data would also include about Rs 150 cr of TCS shares sold by Tatas. FII positive numbers will keep the momentum going up with the India Conference of many FII brokers bringing in interest

Bajaj stole the show today. The market talked about stock split in Bajaj Auto. The stock gained substantially on back of this. We like the company but near term competitive pressures are expected. However we believe that the interest was more to do from the fact that Uttaranchal facilities may be near completion and that would add to the margins. The news was positive with Sri Lankan courts decision in favor of Bajaj and against their Sri Lankan importer Ranatunga Motors against the sale of Ranamoto Gulsar. Ranamoto Gulsar is an Chinese version of Bajaj's Pulsar model. Company has started registering its name, design and Brands in the countries where it intends to sell and also deputed a team to track such cases in other export markets to avoid such incidents in future in its other export markets. Bajaj Auto sells 5,000-6,000 bikes per month in Sri Lanka out of which 1,000 are Pulsar 180 model. Bajaj is still a strong contender as an investment option in the two wheeler segment with 34% market share in the two wheeler industry and a strong hold in the three wheeler segment with a market share of 78%. We are positive on this one.

InsdusInd Bank rallied on back of news that Hindujas intends to sell 20 per cent stake to a MNC bank..at Rs 80 per share. It was also said that this deal mandated by RBI. We believe that, the price cannot be mandated. and by the RBI, certainly not. This pricing is probably an expectation of the Hinduja group. IndusInd bank has strengths in credit disbursal but its tough to source funds and that is key for success. The stock closed up 6%.

Technically Speaking: There were 1320 advances against 1337 declines still market ended high as rally was led by selected stocks. Market traded in the range of 14,478 and 14,493. Resistance lies around 14680 levels while support is around 14520 levels. Volume was good at Rs 4,641 cr. 14,720 level will be the next level to be watched out. Key support is now at 14320.

Close: Choppy market as investors consolidate gains !

Indian Indices were highly ranged for the day but closed in red. Profit booking would best describe this action. The indices traded mixed all day undecided on the direction to take. Selling was seen in the index heavy weights and selective Mid and Small Caps and also the sectors like Auto Ancillary, Energy, FMCG, Chemicals and Finance. Cement and Sugar stocks saw some buying. Asian Markets ended in positive with Europe also in green. But that did not help Indian markets much.

Sensex closed down by 38 points at 14478.19. Weighing on the Sensex were losses in RCVL (489.15,-5 percent), Hindalco (174.3,-2 percent), Hero Honda (719,-2 percent), Bharti Tele (770.5,-1 percent) and HDFC Bk (1088.15,-1 percent). Losses were restricted by gains in Rel Energy (560.25,+2 percent), Ranbaxy (420.05,+1 percent), ICICI Bk (957.35,+1 percent), Cipla (250.1,+1 percent) and HLL (209,+1 percent).

NRC closed up circuit. There was a block deal of 7 lac at circuit. As per unconfirmed reports, Reliance MF was a buyer. The company has 346 acres near Mumbai and indications are that this property has been revalued in a deal which could mean windfall gains for the stock. We have an insight on the stock. Do read for clearer information.


Raymond Apparel Ltd has entered the popular price segment with its new brand called Notting Hill targeted at young professionals between the age-group of 22-30 years. The products would first be distributed through 25 exclusive Notting Hill stores in the state and after taking stock of the response would be expanded to the rest of India in around six to eight months through 400 distribution points. We will be able to comment on it mostly when we see the positioning price levels. The popular segment would be interesting proposition as that is a big market and there gaping holes and provide opportunities. Whether Raymond succeeds here is a question waiting to be answered. We like Raymonds though its struggling with the garments business. The cash is now invested and the strategy seems to be falling in place. With 75% domestic revenues it is a bigger textile domestic play. The company is among the top brands in Fabrics and also has a strong brand for garments in the domestic market. There is a real estate element here as well with 140 acres of land on the outskirts of Mumbai. This could be valued at half the market cap currently and plans are afoot to get value out of that land. Expect benefits from this land over the next couple of years. The Textile stocks traded mixed for the day where as Raymond closed marginally up.

India's largest petroleum marketing company IOC has taken up the merger of its subsidiary and the stand-alone petroleum marketing entity - IBP with itself. The former has already initiated the synchronisation of operations between the two through sharing of infrastructure logistics. IOC has decided to retain the IBP brand even after completion of the merger process. IOC and IBP together have nearly 16,000 retail outlets, out of which IBP operates 3,500 retail pumps. IBP has a 10% market share in diesel and a little over 8% share in petrol sales in the total sales in the country. On the other hand, IOC has 36.9% and 33.8% share in diesel and petrol sales respectively. This merger helps the IOC to strengthen its market share. However the policy of this sector is dependent on the whims of the Politicians. A sector we tend to avoid. IOC closed down by 2% unenthused by the development and more concerned with high crude prices which have lowered realisations of late.

Technically Speaking: It was a seesaw session for the whole day before closing. Sensex touched intraday high of 14564 and low of 14452. Market turnover stood good at Rs 6084 cr. Overall breadth was in favor of Advancers where they stood at 1399 and Decliners stood at 1271. Sensex has managed to maintain the break out and certainly thats positive. 14020 and 14210 should be the stoploss for long positions in this market.

How Market Fared

Global cues to guide market

The markets recorded third consecutive day of gains, as bulls settled on a new peak. Sharp fall in metal prices on LME and rise in crude oil prices dragged the key indices lower at open. However, the bulls emerged victorious as Auto, Power, Telecom, Capital Gods and Oil & Gas stocks lifted the benchmark BSE Sensex to hit an intra-day high of1456.51. Finally, the BSE benchmark Sensex surged 112 points to close at 14515. NSE Nifty advanced by 31 points to close at 4215. HDFC, REL and M&M were among the major gainers. However, Hindalco, SAIL and Colgate were among the major losers.

L&T rose by 0.8% to Rs1692 after the company announced that they have set up a Dh48 million ready mix concrete plant with a capacity of 240cubic metres per hour in Jebel Ali, Dubai. The scrip has touched an intra-day high of Rs1703 and a low of Rs1658 and has recorded volumes of over 4,00,000 shares on NSE.

SBI advanced 1.4% to Rs1197 after the company announced that share sale could be public or Rights issue. The scrip touched an intra-day high of Rs1206 and a low of Rs1170 and recorded volumes of over 12,00,000 shares on NSE.

Radha Madhav was locked at 5% upper circuit to Rs73.35 after the company announced plans to consider the fund raising option for the expansion project on 6th February. The scrip touched an intra-day high of Rs73.35 and a low of Rs66.80 and recorded volumes of over 20,00,000 shares on BSE.

Power stocks were in limelight. Reliance Energy, Suzlon and Tata Power were among the major gainers.

Telecom stocks also were among the major gainers. Frontline stocks Bharti Airtel advanced 1.2% to Rs780, Reliance Communication surged over 5% to Rs517 and VSNL added 0.4% to Rs506

Capital Good stocks ended with smart gains. Heavy weight BHEL gained 0.7% to Rs2518, ABB was up by 1.5% to Rs3808, Siemens has gained by 0.6% to Rs1187 as the German parent is keen on hiking its stake in the Indian arm, Crompton Greaves rose 2.2% to Rs211 and BEML added 0.8% to Rs1091.

Banking stocks also recorded smart gains. The heavy weight SBI and ICICI Bank were among the major gainers. Among the Mid-Cap stocks PNB gained 0.9% to Rs521, Corp Bank rose 0.7% to Rs305 and OBC added 0.6% to Rs220.

Metal stock were the major lowers as according to a Wall Street Journal report, metal trading hedge fund Red Kite's $1-billion fund lost 20% in the year to January 24. Following this report, zinc, copper and aluminum plunged. Sterlite industries lost over 6% to Rs487, Hindalco slipped by over 3% to Rs178, SAIL was down 2% to Rs111 and Nalco lost 1.2% to Rs234.