Weekly Close: Decoupling week.. or was it ?

This was a positive week for the market. No political issues and markets ignored global cues from the US mid week indicating that we were set to decouple Sensex almost challenged to make new highs. Reliance and SBI stood as the pillars holding out. Mid cap and small caps were the stars for the week and quite a few them are covered by us in our research. Bush came in support US market saying that he would stand by the consumer. Markets cheered that but this we believe would only delaying the pain. Indian Markets had a smart run with 8 consecutive sessions of gains with dark clouds of the internal political crises delayed by about a month. However given the silence, the markets seem to be assuming that the worst is over. We believe that this may be the Lull before the storm.

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There are many who believe that a recession may be on cards in the US. In fact, by the time we write this the US unemployment data seems to be pointing to a worsening situation. There was an interesting article from Gavekal which gives reasons to the otherwise mentioned in our note "Economy : Taking stock today." The argument is that the US consumer is extremely dependable and companies have lot of cash and also making profits. The firing of people seems less likely and hence lesser chance of a recession.

Market performance this week was positive: Sensex closed up 1.7% up; Nifty 1% up; Mid caps 2.5% up; Small caps 4.5% up; FMCG & Health care 3.8% up.

Auto sector is heavily banking on festive season. But this is what TVS CEO Mr Srinivasan had to say "We have been reducing our stocks in the market place specifically on Star because of the new launch planned in September. To that extent we have been reducing the stock in the market place that was rolled out on 30th of August. This quarter would be again flat but we expect the market to pick up from the festive season once the credit availability is also there in the market place. We expect that from October onwards sales will start picking up and have 7-8% growth in the next half." Interestingly Honda Motors will increase capacity to 12 lac 2 wheelers and also intends to launch 3-4 models including a 100 cc bike. Bajaj is in the news the Maharashtra Government is worried about its plant closure in Akurdi. Bajaj will be paying the 2700 odd workers in any case. Another statement by Mr Ravi Kant, CEO of Tata Motors says that they do not expect a pick up in demand this season because of higher interest rates. Maruti has extended its price discounts to ensure higher off take. Really, all in all, the news are not encouraging. Lower interest rates are what could be the catalyst. With inflation lower, may be we could hope for that.

This week Eveready reported that it would issue 45 lac warrants for Rs 58. Interesting to note that in Nov 2005 the company had issued 67 lac warrants to the Promoters with an execution price of Rs 95. The Management had paid up 10% of that amount upfront. Also interesting to note that around 9 lac warrants were converted at Rs 95. With the Zinc rallying, profitability was hit and the stock crashed to 45 levels leaving losses on the table for the Promoters and useless warrants in hand. This set of warrants will lower the price of the acquisition and makes more sense. The other set of warrants will not be exercised till the stock hits 85.50 (9.5 is already paid up). We need to know With Zinc at $2850 per tonne, certainly near term would be a buoyant. The warrants at 58 indicate the management?s bullishness. So probably the worst is behind us. The average six month price is Rs 55 so that?'s the reason for the pricing at Rs 58. They would have to pay 10% of this upfront to get the warrants. We are positive about the

In our discussion with Navneet we learnt more about its E-learning initiative. There are some exciting changes happening in the company. The product has been launched in Gujarat already with some initial successes. The Management is certainly more aggressive than it used to be. That's a big change. We like this one. However some negative for Educomp is that there are other players making an entry as well. Edurite (edurite.com) is a company which provides the educational content and that really would be creating some competition for Educomp. Valuations of Educomp seem to have gone through the roof and here are some reason for it to cool off and may be rub off at bit on Navneet. Await a research note on this.

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Conflicting articles continue in papers about the subsidy for the shipbuilders. This issue is in debate between the Finance Ministry and the Shipping Ministry. There possibility that the subsidy may not be extended is less but there is a good chance that the subsidy limit may be reduced. Ships Manufactured in India carry a 30% government subsidy. The Industry has been pleading for the subsidy to be extended. In our discussion with the Management of ABG Shipyard, we are informed that all orders signed till August 14th is eligible for the subsidy. However this topic will take at least a couple of months to be cleared. The Parliament has to pass this. We think this will take its time unless the industry is able to lobby hard to get this off the ground quickly. An ordinance could bring in some positives. But the stocks are seeing strength as if extension is a foregone conclusion. This makes us less comfortable.

Technically Speaking: Sensex closed just above the key weekly support of 15560 levels. The uptrend seems to be buoyant and there is a good chance that we may challenge new highs as long as 15270 as a level is not breached. Volumes traded were good at over Rs 4864 cr for the day.

Market Close: Political nervousness prevails!

Major Indices across the globe ended strong with Asian counter parts like Hang Seng which rallied to end up by 620 points and Nikkei by 415 points. Indian Indices were hit after the strong start due to political nervousness. Session started strong looking at its global peers with some buying in the heavyweights. Ranged session in green till the middle but saw a complete trend reversal as the political uncertainty on Indo US nuke deal jitters across the market. Investors were nervous and didn't knew whether to enter or exit the market. Sensex lost near to 400 points from the days high. Except for some Cement, FMCG and IT stocks all the sectors ended in red. Banking, Oil & Gas, PSU were the worst hit. News of Switzerland's Holcim open offer to acquire 20% more stakes in Ambuja Cement at Rs 154 per share saw some value buying in the cement sector. Mid and Small caps too succumbed to selling pressure.

Sensex closed down by 85 points at 14163.98. Weighing on the Sensex were losses in Cipla (167.8,-4 percent), ONGC (783.95,-3 percent), SBI (1415.05,-3 percent), Rel Energy (705.75,-3 percent) and ICICI Bk (825.8,-2 percent). Losses were restricted by gains in ACC (972.4,+2 percent), Guj Ambuja (132.75,+2 percent), ITC (160.7,+1 percent), Maruti (777.1,+1 percent) and Satyam (422.7,+1 percent).

Videsh Sanchar Nigam (VSNL) is one of the leading provider of international telecommunication services in the country. The company lost the Income-Tax Appellate Tribunal case and now has to pay a possible tax of Rs 1,000 cr to the Government as the order was passed by ITAT. The bench of ITAT informed that the company is liable to pay tax on an income of Rs 2,090 cr earned between 1995 and 2006. The tax effect of this order could be above Rs 1,000 cr. Though the order is only for the assessment year 1996-97, the bench?s conclusion will be binding for the subsequent years also, unless the Bombay High Court reverses the order. Therefore, the tax effect for the period between 1996-97 to 2005-06 including interest payable is estimated to be Rs 1,000 cr or higher. Due this the stock traded weak for the day and ended marginally down.

India's pharmaceutical industry seems to be in a race against time. According to McKinsey & Company's latest report, the country's pharma market is all set to provide the third largest growth opportunity globally. It is expected to triple in size and touch $20 bn by 2015, becoming one of the world's top 10 markets and is expected to grow at 12% annually. Several factors such as large private sector investments in health infrastructure, increase in the number of hospital beds, rise in the number of physicians, greater penetration of health insurance, rising prevalence of chronic diseases and aggressive market penetration by smaller companies will play a key role in the growth of the Indian pharmaceutical market. However, the pharmaceutical industry's concerns on drug pricing policies and product patent regulations could be the dampeners to ensure the 12% growth in the domestic growth. Mc Kinsey?s suggests that while the present generics industry will continue to dominate the pharmaceutical market, patented products will constitute close to 10% of the market in the next ten years. The pharma stocks ended in mixed for the day.

Technically Sepaking: Indices swung in between 400 Points. Declines outnumbered Advances in the ratio 1.8:1. Turnover of Rs 4779 Crs was good. Sensex has a Key Support at 14000-14050 and 13850-13870. Resistance seen at 14425-14440 and 14530-14570.

Close: Markets trying to price in the political uncertainty !

The tussle between the Congress and the Left parties regarding the Nuclear issue continued to weigh on the indices for second consecutive trading session. Lack of support from the Global front resulted in a clearly down market. There were simply no buyers. Central Bank of India listed today at a premium was some solace. SEL Manufacturing also made its debut on the market at a discount was able to end the day in positive. The worries from of Subprime mortgages on the business of Technology stocks had them badly mauled. The major losers for the day were the Technology, Banking, Auto and reality counters. Small and mid caps were also got hammered in the downward rally. European indices continued to trade in the negative territory after a start in red.

Sensex closed down by 438 points at 13989.11. Weighing on the Sensex were the losses in SBI (1463.75,-6 percent), Wipro (446.8,-5 percent), ICICI Bk (830.3,-5 percent), RCVL (483.8,-5 percent) and Rel Energy (692,-5 percent).

Reliance Ind (RIL) closed lower 2% despite discovering Gas in the D-4 block (KG-DWN-98-1) in the Krishna basin. Papers reported another oil find for RIL and in another block which is fully owned. As per reports RIL has submitted part of the information available after MDT and sought a 6-month extension to continue drilling at D4. RIL had to relinquish the block by September-end, if it failed to strike oil or gas. The minister's panel is expected to meet on August 27 regarding the Gas pricing issue. The court case between RNRL and RIL regarding the share of Gas from the D-6 block is also due day after tomorrow.

Sale of Land by Kilburn Engineering (KEL) failed to attract buyers. Kilburn Engineering closed lower by 13%. KEL a unit of Williamson Magor which has a factory on the Bhandup land, agreed to sell its 8.32 acres of land to the Sarang Wadhawan-led HDIL for Rs 125 cr. The total debt in the books is around Rs 15 cr. Net of debt, value per share comes to Rs 81. There is more than meets the eye.

The US-based Blackstone Group intends to acquire 50.1% stake in Gokaldas Exports at Rs 275 per share. Blackstone will also make an open offer for 20% shares, as per the Sebi guidelines, at Rs 275 per share. The total cost of the acquisition including the public offer will come to Rs 682 Crore. Gokaldas derives 83% of its revenues from exports. The top line of the company was under pressure on account of slow down in apparel spending in US from where it got the maximum orders. Stock closed higher by 10%. We have not been positive on Gokaldas given the cost plus business model. We prefer Zodiac.

Technically Speaking: Sensex traded nearly 600 points between day high and low. Declines outnumbered Advances in the ratio of 4:1. Volume for the day was at Rs.4,201 cr. Sensex closes near the 200dma, but most likely to go down further upto 13500. Any pullback rally is likely to get sold off near 14325.

Market Close: Crazy jump with global peers..

Strong support across the global as US FED finally cut the interest rate by 50 Bps to bring in liquidity in the market saw strong rally in US market. Indian Indices surged at the start to trade over 500 points but later part some levels of profit booking at higher. UPA and Leftist Talk kept Indices market in cautious mode. Buying was witnessed across all the counters indicating optimism among the investors. Techies weak the weak ones today while Banking, Metal and power stocks were among the top gainers. Large caps made a good comeback after huge sell-off last week. Mid & Small caps also kept the momentum. Asian markets bounced back to end with a smile as Hang Seng surged by over 1000 points (5% up) and Nikkei by 3%, Europe saw the same as its trading in line with the global trends.

Sensex surged by 286 points to end at 14427.55. It was helped up by gains in ICICI Bk (871.95,+6 percent), HDFC Bk (1125,+5 percent), ONGC (818.25,+5 percent), TISCO (568.8,+5 percent) and Bharti Tele (827.05,+4 percent). Restricting the gains were Satyam (432.5,-2 percent), Infosys (1829,-1 percent), Wipro (469.5,-1 percent), TCS (1054.55,0 percent).

Hanung Toys & Textiles Ltd. a well-known branded player in the toys market. Hanung today reported that the company has bagged an export order from home furnishing retailer IKEA Sweden for exporting soft toys / kids furnishing to the extent of Rs 600 crore (108 Mn Euros). In terms of above order the company expects the business with IKEA to reach a level of Rs 84 Cr in 1st year, Rs 126 Cr in 2nd year, Rs 165 Cr in 3rd year and Rs 224 Cr in 4th year from now. It has outperformed the market over the last few months. Hanung Toys & Textiles has also reported good set of quarter numbers with top line grew by 56% YoY to Rs 85.2 Cr. Recently management has slightly reduced FY 08 turnover to Rs 525-550 Cr & PAT at Rs 60 Cr keeping rupee appreciation as a major concern. The retail boom is supporting the company to grow well. The stock ended up by 5% on the back of bagging the order. We are positive on the stock. We have a detailed note check this out.

Steel Authority of India (SAIL) ran-up as it reported that the company has signed a MOU with Visakhapatnam Steel Plant (VSP) and National Mineral Development Corporation (NMDC) to set up a 4 mn tonne p a (MTPA) integrated steel plant in Chhattisgarh. The MoU envisages setting up a joint venture company with equal equity participation. The Chhattisgarh government will provide land, electricity, water and mining lease to the proposed project. The plant would help the company in increasing their capacity. Further SAIL has a capacity of 15 MT of steel and plans to increase it to 55 MT. The capacity of VSP is 3.6 MT which it plans to raise it to 16 MT. The stock ended up by 4%.

Technically Speaking: Markets traded firm tracking the uptrend in global equity markets overall market breadth was positive. Sensex traded in a north bound session today as it made a high of 14680 and low of 14407 with the Advances outnumbering Declines. Volumes were good as the market churned Rs 3819 Cr. The market is in a pull back trend, yet it is likely to be a laggard when compared to other Asian peers. On the lower side support is seen at 14340 & at the higher side 14650 as a key resistance.

Market Close: Volatile session with no clear direction

Market ended almost flat after witnessing some volatile session but was largly range bound throughout the day. Indices opened on a positive note but quickly slipped into the red zone as investors preferred to book profits at high levels. Absence of any positive cues saw the markets trade largely in the negative zone. Cautious approach by the investors also impacted the indices, which kept the bourses volatile. The market is all about greed and fear. There was greed couple of weeks back and now there is fear stalking on the street. There are some who believe that this time its different but really.. even we dont know and expect only time to tell us that. Sugar, Consumer durables and reality sectors outperformed with some value buying while those from the FMCG, Cement and Auto sectors were out of favour. Selective small and mid caps were able to attract buyers. European indices continued to trade in red.

Sensex closed lower by 16 points at 15000.91. Weighing on the Sensex were losses in ACC (990.3,-2 percent), HDFC (1941.3,-2 percent), Grasim (2878.7,-2 percent), HLL (200.05,-2 percent) and BHEL (1687,-1 percent). Losses were restricted by gains in NTPC (172.75,+3 percent), ONGC (853.95,+1 percent), HDFC Bk (1146.95,+1 percent), Hindalco (153.95,+1 percent) and Bharti Tele (857.75,+1 percent).

JK Tyres closed higher by 4% . For the June ended quarter, the company reported a sluggish top line growth as it witnessed a growth of just 4% YoY. The EBIDTA margins and the Bottom line levels for the quarter improved significantly on account of lower input costs. The proximity to OEM?s (Original Equipment Manufacturers) resulted in lower top line growth. The threat from Chinese imports have increased considerably for the company on account of higher dependence on OEM?s. JK has aggressive capex plans worth Rs.1,200 cr to boost up its presence in the industry. However, We believe that other players are better placed compared to JK. Do read our not to be published shortly on JK Tyres to know more.

Videocon is one of the largest electronic goods manufacturers in the country with the market share of 20%. Videocon has many brands under its kitty to cater to different segments of the industry. Brands owned by the company include Akai, Kelvinator, Sansui, Electrolux etc. The other business of the company include Glass manufacturing, Color picture tube manufacturing. and Oil and Gas exploration. Indian consumer goods is dominated by the Korean giants like LG and Samsung. The other big threat to the Videocon?s consumer durables business is from organized retail. The deep pockets of the organized retails entails them the pricing power. That will impact margins in the consumer durables business in the coming quarters. Do read our note on the company to know other investment arguments against Videocon. The stock was up by almost 3%.

The Company saw its Net Profit up by 46.7% At Rs 486.7 Cr Vs Rs 331.8 Cr (QoQ). Total Revenue was up marginally 2.2% At Rs 1,612 Cr Vs Rs 1,577.1 Cr (QoQ). The company had a Forex Gains of Rs 250 Cr which saved the company as its net profit increased. Rupee appreciation and marginal rise in expenses saw its Operating profit dropped by 5.3% to Rs 347.4 crore, while operating margin contracted by 170 basis points (bps) sequentially to 21.6%. Q4 saw 100 bps Impact due to rupee appreciation. Overall Dependence on US business has gone down by 2%. Forward cover stood at $1.1 bn at the end of June 07. The company?s BPO business continued to be more profitable than its consolidated IT services segment. For the year ended June 2007, consolidated net profit stood at Rs 1354.9 crore, up 75.1% against the previous fiscal. Consolidated revenue grew by 37.5%. to Rs 6,033.6 crore Operating profit for the year increased by 37.4% to Rs 1,337 crore while operating margins remained unchanged at 22.2%. Equity stands at 132.74 cr while the stock at its cmp of 316 trades at 16 times. The stock was up by almost 4% in the early trades but ended flat but in green.

Technically Speaking: Markets followed a volatile trend till the end of the today but within a narrow range. Sensex witnessed an intra day high of 15,070 and low of 14,965. Advances marginally outnumbered Declines. Volume for the day stood at Rs.4,030 cr. Sensex has failed to cross above the key resistance of 15060--15090 for the second consecutive day. On the lower side, a close below 14700 could bring in another downtrend upto 13600--13700 levels. The trend is sideways to down for now. Keep reading us for more views on the market.

Market Close : Positive start for the week but.. with low volumes !

It was a good day for the markets with a firm start but there was volatility during the day. There was pressure seen in IT and Oil & Gas stocks. Cues from Asia were mixed while European market supported the markets at higher levels. FMCG and Metal index lead up over 1.5% holding the market in green. IT stocks slipped as rupee conrinued to trade strong at Rs 40.58 /$ levels. Automobile stocks witnessed fresh buying on the counter. Midcap index and the Smallcap index ended the day up by 1%. The Market managed to bounce back after a volatile session in the last two weeks which gives good support for the rally. Asian indices closed higher.

Sensex closed up 149 points at 15017 helped up by gains in HLL (203.55,+4 percent), Tata Motors (692.2,+3 percent), Cipla (190.9,+3 percent), Guj Ambuja (129.95,+3 percent) and Bajaj Auto (2380,+3 percent). Restricting the gains were TCS (1135.05,-1 percent), Satyam (476.75,-1 percent), Hero Honda (657.5,0 percent), Infosys (1951.95,0 percent). The volumes were low and that is what is the disappointment. Low volumes does not give conviction and indicates lower confidence.

Hanung Toys & Textiles Ltd. a well-known name in the toys market performed well in the market after some reports says that company is in talks with home furnishing retailer IKEA to supply toys and kids furnishings worth Rs 500 Cr. IKEA already accounts for a fifth of Hanung's sales. Hanung reported better than expected results for the quarter ended June 2007 with revenues up over 50% YoY driven by toys Hanung's current order book stands at Rs 400 Cr gives it good visibility. The stock ended up by 9% helped by the order talks. To know more on the company do read the detailed note on the site.

Mahindra & Mahindra intends to ramp up the production of passenger vehicle 'Logan' as well as more than double its dealer network by October-November this year to meet expected surge in demand during the festive season. Currently the company manufactures 2,800-3,000 units per month and plans to increase it up to 4,000 units by the festive season of October. The Logan, which is the country's first wide-body car and which emerged as the largest selling sedan in July, will now be marketed aggressively in the non-metros also. The company has planned aggressive advertising for the Logan and has outlined an ad spend of around Rs 12 Cr to 15 Cr The stock of M&M ended up 3% along with its peers Tata Motors was also up 3%.

Technically Speaking: Market started the day on a firm bull back note taking cues from its peer. Sensex had a north bound session today as it made a high of 15044 and low of 14869 with the Advances out numbering the Declines. The advances stood at 1915 against the declines of 807. Volumes were good as the market churned Rs 4126 Cr. Market support is seen at 14908 level while resistance at 15083 level.

Weekly close: Subprime credit..A nightmare !

Yo yo across with US subprime worries and housing concern haunting this week. US is the super power and no other market was in a position to overcome US excuse any way.. not even India. The fall started with day one of the week. Some bounce was seen on Tuesday or Wednesday but Firday proved to be black once again. Rupee continues to be strong and that?s make thing difficult for exporter. To make things bit easy here Govt. amended the ECB norms which helped market to bounce. But credit worries seems to be getting worsen as many major banks liquidated there positions resulting in global down fall. ICICI is one in India to have exposure to subprime market and it was badly hit. The new ECB norms curb the excess inflow of liquidity so as to curb the rupee strengthening. IT recovered form this but this really won?t help much we think. FM has asked the corporate to be ready for strong rupee without any sops. So exporter will have to manage themselves?short term pressure will continue here. Adding to this was Chinese threading US to liquidate its vast reserve of USD if Washington imposes trade sanctions to force a yuan revaluation. For now it seems to be a cold war?Let see how things pan out.

Sensex Ended down by 1.7% for the week. Amongst Gainers TCS (+4.16%), Wipro (+ 2.17%), Tata motors (+1.90%), Dr.reddy's (+1.30%),Satyam (+1.3%), Infosys (+1.59%) and Losers were Bharti Airtel (-8%), Hindalco (-6.22%), ICICI Bank (-5.5%), ONGC(-4.99%) Rcom (-4.34%), Maruti (-4.2%), HUL (-3.79%), LNT (-3%).

Weekly performance for the Markets : BSE IT index 1.5% up, Sensex down 1.7%, Reality down 4.5%, Metal down 4%, Index gainers Suzlons and Jet (4% up each), Index losers VSNL (8.35% down); ICICI Bank (5.5% down); Nifty down 1.4% ( 61 points down); Midcap 2% down; Small cap down 0.3%

Mid caps index slipped by 2%...But one should note that mid and small caps is holding the strength and that is really good sign. This indicates that there value buying. Market is more value driven rather than liquidated.

Wipro was in news on its acquisition of Info crossing. This company provides infrastructure management services, data centers, help desk, network management, data security and shared services including storage. With revenues of $229m and 18% EBIDTA..at $ 600 mn value, its certainly not come cheap. Wipro seems to be gunning for growth and the price paid certainly is not less. The capacity utilisation is 50% and thats some consolation but its clearly not a great deal. We believe that Wipro would have to work hard to make this deal look good. However let?s not belittle their efforts. Managing a company of their size, it?s certainly creditable. This may prove to be a good long term decision but near term it offers no excitement. With the subprime fallout, the impact on software companies will be felt. Financial services form bulk of revenues for most biggies and even the small companies. The Exposure for the companies to this space is as follows. TCS - 43%, Infosys - 36% Wipro - 24% Satyam 24% HCLT 28%. Over the last two quarters growth has been muted for Infosys in this space.. but TCS has seen good growth. We expect a fallout here over the coming quarters. At these valuations this risk is not priced in or may be we are wrong in assuming that no such risks exist.

Reliance is in the eye of the storm for now. The group of Ministers will decide on the pricing for gas. Anything left to Indian politics to be decided carries its share of negatives. Gas prices clearly cannot be market determined given that there is no market. Next few days will see hectic lobbying. RNRL and NTPC are beneficiaries from a negative for Reliance. The penchant to 'squeeze' the Private sector is in the blood of the politicians seen politically right. Thus RIL is more likely to be on the receiving end. The Fertiliser companies are ones who will also get the gas and that could be the driving factor for the pricing. Let?s see whether Reliance manages a coup up the needs.

TTK prestige?s performance for the quarter was brilliant with the bottom line witnessing a growth of over 80%. This is the period of consolidation for them as the company has decided not to have any more smart kitchens across the country. They already have 180. The sales growth was muted at only 9%. In a discussion with the Management we were informed that as SAP got implemented across the company, some sales got delayed into the current quarter. Margins were good on the back of higher margins Kitchen appliances selling more than the Cookers. Interesting to note that Mixies and Gas stoves drew the sales big way. This company too saw lower adspend this quarter though in absolute terms it?s the same. That seems to be the trend in brand driven companies. We remain positive and the stock is on its way to perform. Do refer our research note for details.

We Spoke with Mcnally Bharat Management. The company is expecting Rs 2000 crore orders from Iisco. The company has Rs 5000 crores of orders which it had already bid for. Going ahead steel based projects would comprise a bulk of its revenues, but its tie up for port based and power plant projects make?s it well placed. This group seems to be quite open about its businesses and accessible too. Steel projects have a life cycle of 36 months. This year will see muted growth in the bottom line on higher tax payouts. We are positive here. A company at 9x FY09 earnings with expected order book and jumping margins has limited downsides.

Tyres companies had great Quarter. Rubber prices jumped to trade at Rs.93 per kg. The increase is on account on heavy rainfall in Kerala which has made taping of rubber difficult. Adding to this Jump in prices is the Chikungunia disease in Kerala. This has created shortage in supply of rubber. However, the supply side constrains seems to be short term in nature and are expected to be sorted out within a month. No major impact of it is expected on the tyre companies. We have a positive view on Apollo tyres and Balkrishna Ind. We have note on both these companies just do read to get more idea.

Ambuja Cements Ltd., India's third-largest cement maker, recently stopped its operations at its plants in Gujarat due to floods. The total capacity in Gujarat is nearly 6 mn tones. Loss from the flood will be covered by insurance; this might not impact much for the company. Last week South Indian cement companies increased prices by Rs 3-5 per bag. The major players in south are ACC, India Cement, Kesoram and Madras Cement who are to benefit. Due to huge demand even in monsoon, a price hike is expected. ACC Sales for the month of July were goo as its witnessed a growth of 15% yoy. The company's production grew by 11% in July to 1.63 mn tonne from 1.47 mn tonne a year ago. During January - July, the company's production stood at 11.84 mn tonne against 11.15 mn tonne in the same period last year and despatches rose to 11.84 mn tonne from 11.10 mn tonne as compared to same period a year ago. Due to strong demand even in monsoon season we expect the company to deliver good numbers for the coming quarter. We are positive on this sector; one can look as an investment opportunities here.

Technically: Market waits for further lower levels. Traders should not confuse pull back as strength and take aggressive positions. For strength we need to see market consolidate between 15100 and 14900. The saving grace in this fall is that, markets have not violated the trend line supports around 14440 on the Sensex and 4200 on the Nifty and today's mild pull back came from 75% retracement level on the Nifty. These positives may not be enough for market to turn around and test of these levels are a distinct possibility in the next week. Let the fear wash itself out and wait for market to bounce off a strong support area, until then stay light on your portfolio or stay in cash.

Market Close: Sub prime worries hits India too!

Firm global cues fueled the Indian indices to continue yesterdays euphoria, but profit booking oflate kept the indices down and closed in deep red. Asian markets closed mixed. Indian indices started the day on a strong note and traded ranged till mid session. But the news on BNP Paribas, France's biggest bank freezing 3 Asset Backed Funds on US Subprime losses saw some volatility there after. As result of this European markets opened in red and weighed on Indian indices too. Sensex lost more than 500 points from days high. All the sectors closed in red, Consumer Durables, Oil & Gas, FMCG and IT were the worst hit. Mid and Small caps were also not spared from the selling pressure and ended in line with frontline indices.

Globally Speaking: Some reports suggest that the Chinese government has begun a concerted campaign of economic threats against the United States and has hinted that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation. For now it is just warning. Lets see how this pans out and how market will react to this.

Sensex closed down by 208 points at 15100.15. Weighing on the Sensex are losses in Hindalco (156,-4 percent), SBI (1649.6,-3 percent), Rel Energy (757.9,-3 percent), Ranbaxy (371.6,-3 percent) and Satyam (467.1,-3 percent). Losses are restricted by gains in Dr Reddys (638,+1 percent), BHEL (1733.05,+1 percent), Cipla (188,+1 percent), ICICI Bk (890.25,+1 percent) and Wipro (478,+0 percent)

Orbit Corp. sold the land to JSW for a super Rs 300 crore profits. OCL is a niche real estate company with a business of redevelopment of dilapidated buildings. OCL has 15 projects in hand with a saleable area of 1,1 lac square feet. and no land bank. OCL is the only company to offer warranties against defects in construction. The story about the sale was doing rounds and the speculators were expecting Rs 900 crores as well. So in a sense the sale price news is a let down. However all in all its a good deal for orbit but these kinds of profits do not entail a P/E multiple as its a one time gain. One needs to see the sustainable business value and that most likely has been surpassed in the recent rally. As result of this the stock rallied up by 14%, closed at Rs 450.

Last week in South India cement prices increased by Rs 3-5 per bag. The major players in south like ACC, India Cement, Kesoram and Madras Cement are the major beneficiaries. Due to huge demand even in the monsoon season one can again expect the price to be hiked in coming months. ACC reported almost 15% yoy growth in July month's despatches. The company's production has grown by 11% in July to 1.63 mn tonne from 1.47 mn tonne a year ago. During January - July, the company's production was at 11.84 mn tonne against 11.15 mn tonne in the same period a year ago and despatches rose to 11.84 mn tonne from 11.10 mn tonne as compared to same period a year ago. Due to strong demand even in mansoon season we expect the companyes to deliver good resutl in coming quarters. We are positive on this sector, one can look for down side for investment opportunities. All the cement stocks ended in red. ACC closed down by 2.41%, India Cement down by 3.23%.

Technically Speaking: Sensex started the day on a strong note but late panic selling session saw it end in deep red. Sensex touched an intraday high of 15542 and low of 15062. Market turnover was good at Rs 5036 cr. Overall breadth was in favor of Declines, where the Advances to Declines ratio stood at 1:1.6. Sensex looking to retest supports near 14850-14900. Medium term trend will turn negative if the supports of 14700-14735 is broken

Market Close: Nose dives ahead of Fed meet !

As expected Indian market bounced with global market and rally was seen across the board. Investor participation helped the market to maintain the momentum for a while after start. But as the day advanced market found it difficult to sustain the rally. Some stock specific action was seen in small and mid caps. Auto, and Technology stocks bounced back smartly as this both counters seems to be oversold. Aviation counter also took off on lower crude prices. ICICI and ITC actually dragged the market. ICICI announced deposit rate revision. However some recover was seen in bank counter?but credit off take seems to be lower than deposit growth rate which is weighing on banks. Unconfirmed reports indicating slow down in cigarette sales for the month of July hammered ITC.

Now all Eyes ogle on Fed meet in US for interest rate decision. Interest rates are expected to remain unchanged. Lets keep watch here.

Sensex closed higher by 30 points at 14932.77. It was helped up by gains in Rel Energy (764.7,+3 percent), NTPC (166.7,+2 percent), Bharti Tele (876,+2 percent), HDFC (1973.6,+2 percent) and Cipla (187.05,+1 percent). Restricting the gains were ITC (167,-3 percent), ICICI Bk (870.75,-2 percent), Bajaj Auto (2275.2,-1 percent), TISCO (642.6,-1 percent) and BHEL (1671.8,-1 percent).

Nitin Fire Protection closed high after the company signed a MOU for the supply CNG Gas Cylinders to IRAN worth Rs.65crs. The execution of the order shall be done within this current financial year. The company also received Letter of Intent form Bangladesh, U.A.E. and Domestic market for the supply of CNG Gas Cylinder worth approx Rs.25crs. It has also received the purchase order from Reliance Petro for supply of fire extinguishing systems for there refinery for Rs.7 cr. The plant at Himachal Pradesh has started operation for manufacturing of Fire Protection equipments. The demand for CNG cylinder is really big and that is what all the cylinder companies are banking on. But there are some reports which suggest that some new capacities are coming in Iran (biggest market for CNG cylinder). EKC (Everest Kanto Cylinders) is largest player here and has enjoyed huge profit on high realisation. But with additional capacity coming in market the business may not remain as lucrative as it is. We are not excited here. Do read our note on both Nitin Fire and EKC to know more.

Everonn Systems (Everonn) is in the field of education and training. The company offers a fully integrated range of services like creating knowledge resources, designing and delivering the learning and training programs through the medium of computers and other resources. The company also sets up infrastructure and delivery platform for enabling the same. The company gets its revenue from two sources i.e. Education and training which contributes almost 95% of the total revenue while the rest is from sale of hardware which is very small. Governments of various states are its key clients as almost 70% comes from them while the rest 30% are from private schools and colleges. Content is the area where the company lags behind Educomp, its arch rival in the business. We are not really convinced with the business model. Do read our note to know more.

Technically Speaking : Sensex key support seen at 14880 and 14735. If both these levels are broken, the medium term trend could also turn negative and the Sensex might slide upto 14100 and 13600. On the higher side 15240 and 15400 are key resistance.

Market Close: to buy or not to buy !

US markets bounced back on last minute buying whereas Asia was volatile like a Seeesaw ride. Markets opened on a sombre note after the strong selloff seen yesterday. Buying interest in select heavyweights helped Sensex move into the positive territory in the early sessions and then there was some strength noticed on positive global cues. However the optimism soon gave way and markets softened yet again. Banks, consumer durables and realty stocks were able to hold on to some of their gains while capital goods, oil and metal stocks declined sharply and some of them even slipped into the red. Auto and IT stocks were very weak. Midcaps and smallcap segments too drifted to lower levels on profit taking but managed to gain some interest at the end. The sessions so far have been really volatile and that keeps investors away. Its seems that things will continue to be same for while. Extremely volatile and pressuring towards the negative.

Sensex ended up 50 points at 14985.7 helped up by gains in SBI (1592.75,+3 percent), TISCO (638.9,+3 percent), RCVL (542,+2 percent), BHEL (1698.7,+2 percent) and Grasim (2908.75,+2 percent). Restricting the gains were Hero Honda (649.5,-3 percent), Wipro (462.25,-3 percent), Tata Motors (652.2,-2 percent), TCS (1095.35,-2 percent) and Infosys (1899.6,-2 percent).

There was a downgrade of Everest Kanto by a leading Research house. Everest Kanto is the largest player in industrial cylinder in India. Govt. ruling on use of CNG as fuel in auto has boosted demand for CNG cylinders. The demand remains still high but now supply seems to be coming as more capacity is expected to come in Iran and that could change the scenario as Iran and Pakistan were expected to be the big markets. The stock had rallied in big way beyond fair value one coudl say. We believe more downsides is on cards.

ABG shipyard Ltd performed well and ended up by 2% after it has reported good results for Q1. It has received major order for construction of 12 vessels of approximately 32,000 dwt for Rs 1460 cr from Thailand's Precious Shipping Public Co. Ltd. The outstanding order book is now at Rs 5560 cr. Valuations appear to be rich. We are positive on business. However its the valuations are somewhat discomforting. Do read our detailed note on the site to get clearer picture on the stock.

We had a research note on Greenply as well. This company has been a winner for our research for quite some time. However the important thing is that we believe that the business is beginning to catch momentum and really its something to watch out for.

Technically Speaking: It was a fairly a volatile day for the market. Sensex made a high of 15135 and low of 14896 with the Advances out numbering decliners. The Advances stood at 1390 against the Declines of 1275. Volumes were low at Rs 4419 Cr. Sensex has moved into a short term downtrend with supports at 14800 and 14450. Having left unfilled gap on the higher side, there is chance of some bounce back up to 15200...15400 levels.

Market Close: Mayhem across and in India too.

Fall again in the market with global meltdown. After yesterday rally, the euphoria was outshined with the gloabl cues as it remained weak throughout the day in the red zone. US brougth in the jitter with its weakness looking at subprime market followed by weakness in Asia and European markets which further dampened the sentiment as selling intensified on the bourses. Nikkei tumbled 2.19%, Singapore's Straits Times was down by 3.27%, Taiwan's Taiwan Weighted down 4.26%, Hang Seng down by 3.15% and South Korea's Seoul Composite down 3.97%. China's Shanghai Composite was down 3.81%.

As the day progressed, Indices lost further ground with the Sensex waiving off by as much as 500 points. In the final hour of trading market thought of recovering some of the gains but selling towards the end deepened the wounds and forcing the Sensex to lose more than 600 points at the end. Selling was seen across all board as no sectors were spared from the heat. The Realty index was the worst hit as it was down by 6.64% followed by the Metal, Capital Goods and Oil & Gas indices which drifted down by 4.81%, 4.69% and 4.4% respectively. The other indices lost 3% - 4% from their previous closing levels. Midcap and Smallcap indices tumbled 3.82% and 3.65% respectively.

Sensex Slipped to end down by 615 points at 14935.77. Weighing on the Sensex were losses in ACC (965.9,-9 percent), Rel Energy (737.3,-7 percent), Hindalco (159.15,-6 percent), Ranbaxy (367.8,-6 percent) and RCVL (530.6,-5 percent).

Financial Technologies reported a phenomenal jump on a consolidated basis in net profits for the quarter ended June 2007. During the quarter, the company experienced an 87% rise in profits to Rs 71.5 cr from Rs 38.2 cr in the quarter ended June 2006. Total income rose 2.01 times to Rs 165.3 cr for the quarter ended June 2007 from Rs 82.2 cr for the same period last year. On standalone basis the company posted a net profit of Rs 60.8 cr for the quarter ended June 2007 as compared with Rs 10.1 cr for the quarter ended June 2006, an increase of 6.02 times. For the quarter ended June 2007, the company's total income jumped 4.43 times to Rs 102.8 cr compared with Rs 23.2 cr for the quarter ended June 2006. The total number of trading licenses has grown to 184,000 as on June 30, 2007. The company has promoted India's leading multi commodity futures exchange (MCX) and inter bank forex trading platform (IBS-Forex). MCX stands as the third largest bullion exchange in the world after New York Mercantile Exchange (NYMEX) and Tokyo Commodity Exchange (TOCOM).

Hindalco reported its first quarter results which were subdued. The topline grew by 9.5% YoY driven by higher aluminium and copper sales. The company had 6% YoY growth in revenues of the aluminium division which couldn?t help to sustain the PBIT levels as it was hit by the 10% YoY drop in segmental PBIT that really impacted the company's performance. The continued strong performance of the copper division which was up by 12% YoY did provide some support to the overall performance of the company. As far as the overall EBITDA margins of the company are concerned, barring power and fuel costs all the other three cost heads witnessed significant appreciation and which pulled down the margins by a significant 290 basis points. Growth in the bottomline was seen at 0.2% YoY. The stock ended the day with a 6% decline.

Even as the market fell sharply, Everonn Systems India settled at Rs 478 on BSE with a 242% premium over the offer price of Rs 140. The huge premium on listing was due to 131 times subscription of the IPO as the company received total bids for 52.58 crore shares compared to total issue of 40 lakh shares. The Everonn Systems India scrip debuted at Rs 245 on BSE and touched a intraday high of Rs 560 and a low of Rs 245 during the day. About 71.77 lakh shares were traded on the counter on BSE. Everonn Systems India is a fully integrated knowledge management, education and training company.

Technically Speaking: Weak global cues made the market open gap down by 200 points. Sensex could not recover from the gap as it sliped further. Sensex made a high of 15334 and low of 14911 with the Declines out numbering advances. The declines stood at 2147 against the advances of 533. Volumes were good as the market churned Rs 6267 cr. Sensex has moved into a short term downtrend with supports at 14800 and 14450. Having left unfilled gap on the higher side, there is chance of some bounce back up to 15200..15400 levels.

Market Close: Recovery post CRR hike !

All eyes were on RBI's meet as it was supposed to decide on liquidity tightening. That kept the indices ranged and negative biased till the decision of CRR hike was announced by the RBI. Global markets bounced back today and India followed the same trend. But as soon as RBI announced CRR hike market indices took a dip. However, buying at lower levels across major sectoral indices in the final trading hours helped to offset the negatives on CRR hike. However we believe that the impact will be seen gradually. The major gainers for the day were on the Banking, Consumer Goods, Metals and Reality counters. Small and mid caps were also able to attract buyers. Europe was in green.

Banks have already reported a slowdown in the credit off take because of higher lending rates?CRR will further bring it down. We believe that the impact of the CRR hike would also continue to impact the corporate Indian on account of higher rates. We expect the fuel prices in the country to be hiked in the next few weeks because of higher crude prices. That would further add to the inflation. Let see how CRR hike helps to control inflation. We will bring more updates here for you..Keep watching this space.

Sensex was by 307 points at 15567.89. It was helped up by gains in HDFC (2006.5,+5 percent), L & T (2568,+5 percent), BHEL (1720,+5 percent), ACC (1057.7,+3 percent) and Ranbaxy (388.75,+3 percent). Restricting the gains were Maruti (831.05,-2 percent), Hero Honda (674.95,-2 percent), Tata Motors (699.9,-1 percent), HLL (206.8,-1 percent) and Infosys (1973.25,-1 percent).

Larsen & Toubro was one of the major gainers for the day. Company?s net profit for the June ended quarter was at Rs.377 cr vs Rs.157 cr, up by 140%. Net sales for the quarter were at Rs.4505 cr vs Rs.3469 cr, up by 30%. Company bagged orders to the tune of Rs.3,445 cr in the month of July itself. We believe that the company is well placed in the industry. Order book is large and it will continue to bag more orders. Valuations are high and growth as well !

Ceat delivered good set of numbers for the quarter June. The top line witnessed a growth of 8% YoY. The EBIDTA for the quarter was up by 248% to Rs.64 cr?thanks to lower rubber prices. The bottom line stood at Rs.30 cr against Rs.0.23 cr in the same quarter previous year. The proximity to the OEM?s (Original Equipment Manufacturers) which had witnessed a slow down in the last quarter which impacted the top line growth for the quarter. The revenues from the OEM?s were down by 10% while that from the replacement market were higher by 12%. We believe that other players are better placed in the industry compared to Ceat. Do read our note on the company to be published shortly for that.

Everest Kanto Cylinders (EKC) the largest manufacturer of CNG cylinders in the country ended 4% higher for the day. 60% of EKC's production goes to retrofitters and 25% to OEM. Demand and supply gap has made company enjoy huge profits and things will continue to be the same for next few years. CNG is more economical as compared to petrol...so high crude may force more people to go for CNG. Govt. ruling is also helping. But we are not a buyer ! Do read our note to know more.

Technically Speaking: Indices rallied after RBI?s CRR hike news. Sensex made high of 15569 and low of 15225. Advances were much ahead of Declines in the ratio 1.7:1.Sensex churned a turnover of Rs 5255Cr. VJ stood to the stand that markets will test 15500 after the fall during midday. Markets bounced back as per the reading of VJ and closed above 15500.

Market Close: Gains outshined ahead of RBI meet.

Jittery start but Heavyweigths supporting the the rally. Indices with SBI results, REL, Cement majors and HUL rallied over 200 points. REL Energy won the Sasan ultra Mega Power, Cement majors rallied fuelling Indices to cover losses made in the previous session. As we mentioned in the outlook market did bounce but fell at the final hours as investors traded cautious to close marginally up. Banking stocks surged ahead of the quarterly monetary policy as Reserve Bank of India (RBI) is scheduled to meet tomorrow. Asian markets recovered at the close while Europe opened on a positive note tracking Asia.

Sensex ended up by 26 points at 15260.91. It was helped up by gains in HLL (208.75,+6 percent), SBI (1579,+5 percent), Guj Ambuja (129.3,+3 percent), Grasim (2946.8501,+3 percent) and ACC (1022.6,+2 percent). Restricting the gains were Hindalco (166.15,-4 percent), ITC (167.3,-3 percent), TCS (1137.75,-1 percent), Bajaj Auto (2292.5,-1 percent) and Dr Reddys (635.95,-1 percent).

Hindustan Unilever (HUL) surged 6% up after the board of directors considered and approved a share buyback up to an aggregate amount of Rs 630 crore at a maximum price of Rs 230 per share which is subject to shareholders approval and also it has reported a 23.9% increase in second quarter net profit before exceptional items. The growth was boosted by increased prices of some key brands and better sales in other categories such as foods. HUL formerly Hindustan Lever posted a profit of Rs 472 C after adjusting for the profit on the sale of land in Maharashtra. The shares are proposed to be bought from both the exchanges through open market purchases from time to time. It has also recommended a dividend of Rs 3 per share. The maximum buyback price is at a premium of 17%. The share capital would be reduced by 1.24% if the buyback value is at Rs 230 and the shareholding of Unilever which holds a little over 51% would increase by about 0.6%.

GAIL (India) Ltd. has recorded an impressive growth in Q1. Profit After tax has increased by 16% to Rs.685 crore in Q1 as against Rs 592 crore in the corresponding quarter in the previous year. Turnover (excluding Excise Duty) has increased by 4% to Rs. 4,246 crore in the first quarter of 2007-08 as against Rs 4078 crore in the first quarter of the previous financial year. The PBT has also increased by 14 % to Rs 969 crore in the first quarter of the current financial year as against the Profit before Tax of Rs 852 crore in the corresponding quarter the previous year. The increase in revenue is mainly due to higher per unit realisation from petrochemicals, the increase in production of Petrochemicals by 29% and increase in LPG transmission by 19% during the quarter. During the quarter polymer sales were 105000 MT up by 29% from 81,000 MT in the corresponding quarter in the previous year. The results were in line with market expectations which set in motion market sentiments as the stock ended the day up by 5.8% after the results.

The government on Monday awarded the 4,000 MW Sasan ultra mega power project to Reliance Energy. REL submitted the lowest bid of Rs 1.19616 per kilo watt hour. Initially, Lanco had outbid REL with a tariff bid of Rs 1.196 per unit. The consortium later broke after Globeleq sold its stake to Lanco and Jindal Steel and Power Ltd. Sasan Power Ltd, the special purpose vehicle set up by Power Finance Corporation for setting up the project, had asked three other bidders - RPL, NTPC and Jaiprakash Associates - to submit fresh bids. NTPC and Jaiprakash Associates, however, did not change the prices. Lanco also rallied to close up by 10%.

Technically Speaking: A volatile day which continued to trade between an intra day high of 15,452 and low of 15,135. Volume stood at Rs.5031 Cr. Advances outnumbered the Declines where Advance was 1360 and Declines stood at 1367. Sensex has broken the key short term support of 15550, which has turned its short term trend to down. Support range1 of 15110 to 15160 is a key gap support which remained unfilled for quite sometime. As the short term trend is down, the market will look to sell off from very rally. Currently the second resistance range is most important, which if fails to hold the up move then will negate the short term downtrend in the market.

Close: Sensex in a hurry !

Markets started off with a bang carrying the momentum of yesterday closing and then there was no stopping. It was Reliance which lead from the front. The ferocity of the upmove in the absense of any positive global cues surprised one and all. There were no results which could be called spectacular today and even more the numbers were more of a disappointment from Wipro and ACC. However Wipro closed steady and so did ACC. Reliance as a heavyweight led the markets and the gas find seemed to find the buyers today as analyst did their back of the envenlope calculations.

WiposIts results season. Larsen results came in strongly positive and the stock rallied. However some other income dampened the enthusiasm. ACC results were certainly a disappointment. The stock was hit but made a strong come back. There was some profit taking seen in the banking sector. The talk is that the RBI may have a CRR hike even ahead of the meeting now that the offers of UTI bank, HDFC bank are over with. Tough call but given the positive momentum, the markets closed up in a frenzy.

Sensex closed up by 249 points at 15550 helped up by gains in Tata Motors (778.05,+5 percent), Bajaj Auto (2381.75,+4 percent), RIL (1896.45,+4 percent), Grasim (2996.45,+3 percent) and Infosys (1996.85,+3 percent). Restricting the gains are Hero Honda (693.4,-3 percent), HLL (197.85,-1 percent), Rel Energy (685.9,0 percent), Cipla (205.45,0 percent) and Dr Reddys (665.05,0 percent).

Transport Corporation of India was one of the stocks in action. This company is set to be a large logistics company and will benefit from the growing oranisation in the unorganised Transportation market. We had a note just last month and the stock has delivered exceptional gains. Do read that note

Larsen & Toubro ended 2% higher post its quarterly results today. Net profit for the quarter came in at Rs.377 cr vs Rs.157 cr, up by 140%. Net sales stood at Rs.4505 cr vs Rs.3469 cr, up by 30%. Company had bagged orders worth Rs.3,400 cr in the month of July itself. The order book remains healthy. However a fly in the ointment was the large other income. Valuations at 28 X FY 8 certain price in superb execution. We would look for lower levels here to take position. The risk from slippage in execution remains high.

Prime Focus Ltd. (PFL) the largest independent company in the business of post production for Movies and Advertising films ended 3% higher. VTR has turned around and the company intends to make the UK business even more profitable with cost rationalisation. We had a research note on the company today where we believe that the growth may disappoint as we believe that the only scalable part of the business is the Visual Effects and thats still small part of revenues for the company. The company provides integrated production and visual effects services in India. Its services include visual effects, digital intermediate, film scanning and film recording, telecine, editing, motion control, etc. Do read the details for our view !

Eastern Silk Ind the major silk exports major from the country closed 2% higher. The top line of the company in the last quarter witnessed a growth of 10% YoY. The lower input costs coupled with improved product mix helped in improved margins. Lower input costs also helped in offsetting the impact of the appreciating Rupee. The recently started manufacturing unit near Banglore is expected to increase the installed capacity by 20%. Do read our note on the company to know the risk factors and the investment arguments in favor of the company.

echnically Speaking : Sensex traded in a broad range for the day between an intra day high of 15,993 and low of 15,357 levels. Volume to the tune of Rs.5,699 cr was churned out through out the day. Sensex has hit our expected target level of 15550. We could see some pullback from here on profit booking. The trend remains up. Support for sensex at 15400 and 15330. But its better to avoid predicting a top. Enjoy the ride.

Market Close: Is this a sign of correction ?

Global cues were mixed and nothing to settle on...But buying in Index heavyweights particularly Reliace helped the indices to gain. However profit booking crept in the mid session and pared off all the gains. Reliance Industries continued to support the indices right from the start of the session on the back of Gas discovery news. Technology counter continued to bear the brunt of Rupee appreciation. Profit booking was witnessed on the Auto, Banking and Metal stocks along with small and mid caps. Celestial Labs which got listed today closed at a premium. Higher Crude continued to impact the Aviation counter along with the Oil marketing companies. Some stock specific action was seen ahead of resutls. However we believe that normally stocks run up ahead of numbers and see profit taking once the results are out. So its better to avoid buying post good numbers. Better to wait for the cool off.

Sensex closed down by 32 points at 15278.95. Weighing on the Sensex were losses in RCVL (561.15,-2 percent), BHEL (1622,-2 percent), SBI (1579.5,-2 percent), TISCO (680.25,-2 percent) and Bharti Tele (862.05,-2 percent). Losses were restricted by gains in Guj Ambuja (137.2,+3 percent), RIL (1825.95,+3 percent), TCS (1155.95,+2 percent), Dr Reddys (674,+2 percent) and Hero Honda (695.5,+2 percent).

Reliance communication ended 2% lower. Company increased its subscriber base by 1.45 million in the month of June. This makes Reliance the fastest growing CDMA service provider in the country. The talk time registered by the company is 50 crore minutes per day. Company continues to grow aggressively by lowering the price barrier. The Rs.777 plan launched by the company helped in adding a million customers in just a week. Company intends to add 100 million customers in the next few years. In order to support the increasing subscriber base Company intends to set up a network of 23,000 towers through out the country. This will involve a capex of Rs.16,000 cr. A $ 400 million contract was recently awarded by the company to expand its wireless network to over 20,000 towns and 600,000 villages in the country. Tower business of the company would get listed once the private equity placement deals of the company is through. Mr. Anil Ambani also informed that the private placement of the equity deal is in advanced stages. We believe company is well placed in the telecom sector and could be considered as a long term investment option.

Bajaj Auto continued its weakness. Company reported a net profit of Rs 226 Cr against Rs 266 Cr in the corresponding quarter of the previous year, down by 15%. PAT margins saw a 134 bps yoy decline. Net Revenues were down 4% at Rs 2109 crore from Rs 2202 crore (YoY). Company intends to launch a new model in the month of September. The new bike will provide comforts of 125 cc bike However, The price and economy would be in line with the 100 cc bikes. We believe that could help in bringing the volumes, which would be the key to success. This will help in beating Hero Honda the arch rival of the company in the Two wheeler business. Bajaj was also looking for a big-ticket acquisition in the European motorcycle market. We believe that the margins pressure is unlikely to ease much on the back of cut throat competition. The dependence on the new platform is excessive. This launch is due in September. There is also the demerger which has to take effect. Its not a very clean demerger and it seems more like a family rearrangement of holdings. Do read our note for more details.

Nitin Fire was 3% higher. The company is into manufacturing of Fire protection equipments and Cylinders (Industrial and CNG). Fire protection is growing at 20-25% but it is CNG cylinder where we see exponetial growth. To cater this growth Nitin has put plant in Vishakhapatnam which was suppose to go on strem by July 2nd week. Probably this was the reason for action in stock. EKC is the biggest player here (3rd largest globally) and agressively expanding to become world no. 1. We remain positive on both the company but valuation is what makes it unattractive.

Technically Speaking : Sensex traded between an intra day high of 15,440 and low of 15,272. Declines outnumbered Declines in the ratio of 2:1. Support lies at 15,225 levels. The resistance is at 15,000 levels. Turnover was to the tune of Rs.6,023 cr for the day.

Market Close: Consolidation or.. ?

After new high Indices witnessed some level of Profit booking. Market remained rangebound throughout the Session with buying and selling across which created a tag of war, pushing Indices on either side of the Region. Selling was seen in the mid session in IT, Pharma, FMCG and capital good while Realty, Banking, Consumer durable and Metal space managed to attract decent buying interest to close in green. Midcaps & Smallcap their winning streak as they kept investors busy. Market was in line with Asian markets which ended mixed while Europe is trading weak. IT major TCS results are expected after the market hours..

Sensex ended up by 38 points at 15311.22. It was helped up by gains in Rel Energy (705.9,+5 percent), SBI (1613.5,+4 percent), Bajaj Auto (2255.3,+4 percent), RCVL (574.05,+3 percent) and Guj Ambuja (133.3,+3 percent). Restricting the gains were Wipro (500.7,-2 percent), Satyam (482.05,-2 percent), HLL (198.15,-2 percent), Ranbaxy (345.65,-2 percent) and BHEL (1659,-1 percent).

Software Company Mastek Ltd was on the peak after it reported of acquired 90 % stake in US-based Vector Insurance Services LLC for nearly Rs 40 Cr ($ 9 Mn), about 50% in cash and 50% in earn out. The acquired company had revenue of USD 4.2 mn last year. This was strategic Acquisition which wil reinforces the solutions-driven offerings in the high opportunity US insurance market. Vector fits very well with Mastek's overall strategy to be a leader in providing end-to-end IT solutions within the insurance vertical. As per the agreement Mastek's wholly-owned US subsidiary MajescoMastek would buy 90 % equity stake in Vector. Mastek's presence in US will get a boosted and operations in the US insurance vertical also will enable greater value for its shareholders over the long-term. Mastek expects it to be profitable, as it will bring in synergies in terms of costs. Mastek Surged to trade at its all time high level.

Reliance Communications has announced that it has acquired US based Yipes Communications in a Rs. 1200 crore ($300 million) all cash deal. With this acquisition RCom will enter the enterprise and institutional data services market in the US. Yipes is operational in 14 cities in the US with over 22,000 route km of optic fibre. It has around 1000 enterprise customers including Verizon and is cash positive with operating margins of 55 percent. Reliance plans to take the Yipes franchise global in association with Reliance Communication owned FLAG Telecom. FLAG telecom has turned profitable for the first time in its history. Reliance has invested Rs. 2000 crore in FLAG since its acquisition, and all investment has been done financed internally by cash flows generated from FLAG operations. Rcpm managed to see some level of Buying to close up by 3.5%.

Technically speaking: Volatility plagued the markets today and traded ranged to make intraday high of 15341 and low of 15217 levels. Through out the day the Advance outnumbered the Decliners as the Advances stood at 1481 against Declines of 1224. Market turnover was good at Rs 5270 Cr. Sensex support is seen at 15120 levels while resistance at 15500 levels. Sensex has broken into a new zone and trending up with gap up open. This is a very bullish sign and signifies more new highs to come. The trend remains up, avoid shorts.

Market Close: Upward Journey continues..

It was a jump start for the Indian Indices as Sensex and Nifty cruised above 15k and 4400 levels. Sensex crossed 15 levels but failed to susatin above this milstone on Friday. Indices traded strong but witnessed some level of profit booking in the mid session. We are nearing first earning seasons and the markets hoping for good. IT & Capital goods stocks showed some strength as they helded the Indices at higher levels. Techy Major Infosys results are to be out on 11July and the market hopes the results from all techies to be weak due to slip in Dollar against the Rupee. Banks showed their smiles as there was some market news that the RBI might cut CRR (CRR) rate. Good buying was seen in sectors Cement, Metal, Power and Software while Auto was under selling pressure. Midcaps and smallcap outperformed the benchmark indices giving market an excellent breadth. Asian market ended up strong as Nikkei traded 7 Years high closing while Europe trades in green.

Sensex ended up by 82 points at 15045.73. It was helped up by gains in Rel Energy (615.5,+3 percent), L & T (2415.8,+2 percent), Bharti Tele (883.55,+2 percent), ONGC (895.85,+2 percent) and TCS (1176.55,+2 percent). Restricting the gains were HLL (195.35,-2 percent), Hero Honda (686.5,-2 percent), ICICI Bk (970.45,-1 percent), Cipla (211.15,0 percent) and Grasim (2764.8,0 percent).

Greenply a well established India player in interior infrastructure industry continued with fabulous performance on the board today. The 4th quarter results were outnumbering with Top line grew by 76% to Rs.111 Cr. The company procures raw material from local forestry in Nagaland and social agro forestry in Uttaranchal which provides easy availability and low transportation cost. As a result margins at operating level improved by 260 bps compared to same period last year. EBITDA enhanced by 126% to Rs.13 Cr for the quarter. Uttaranchal plant went on line during 2006-07. It is expected to go on full steam in FY2008. It enjoys excise and tax holiday and benefits have started flowing to the bottom line. Consolidated Revenue for FY2006-07 was Rs.403 crs where as PAT stood at 22.6crs up over 60%. The Valuations are attractive and we remain positive on this story. We have a detailed research note on our site which will provide you a clear picture on the stock. The stock has run up today up by 9%.

Hikal a leading player engaged in manufacturing and marketing of fine chemicals for the Pharmaceutical and Agrochemical industries reported that it has bagged contract worth Rs 200 Cr from Alpharma a US-based specialty pharmaceutical company. The contract is a long-term agreement for the manufacture and supply of an active pharmaceutical ingredient (API) for the veterinary sector. Hikal will be manufacturing the API at its USFDA approved plant at Jigani, Bangalore. The stock is performing well on board and ending up by 13% after the news.

The Drug maker Dishman Pharmaceuticals & Chemicals has inked a MoU with The Netherlands-based Solvay Pharmaceuticals (Solvay) to acquire the fine chemicals vitamin D and vitamin D analogues business for an undisclosed amount. As per the reports all facilities, people and activities located at Solvay's Veenendaal site in The Netherlands and technology, patent and intellectual property rights will be transferred to the company after satisfactory completion of due diligence procedures, approval from the relevant authorities and appropriate employee information procedures. The transfer of ownership will be completed during 2007.Main activities of this group are the production, marketing and sales of cholesterol and cholesterol related products. This MoU is in line with the Dishman business which will bring new customers and new products to its product portfolio. The stock ended up by 3.5%.

Technically Speaking: Sensex is at all higher level and can upward baised. As the Sensex is at the all time high now, action is picking up in the Midcaps and the small caps. Expect more such moves to happen. The trend is up.Sensex touched an intraday high of 15085 and low of 15005 levels. Overall breadth was in favor of Advances, as Advances stood at 1622 against the Declines of 1047. Market turnover was pretty good at Rs 4551 Cr. Sensex technical support is seen at 15003- 14915 which resistance near 15120 levels.

Market Close: All time high?what's next ?

For last few sessions, market has followed the same trend of Firm start and then to witnessed volatility. The situation was no different today, as the indices opened strong backed by firm global cues but soon pared off gains after it touched all time high. It seems that investors are taking this high as an opportunity to book profits. However, markets recovered later on some value buying. There were some moments to cheer during the day as some sectors saw renewed buying on news. Cement, Sugar, Auto and Steel counters made the indices end in green.

Cement stocks gained on reports that cement companies have hiked prices of cement across India by Rs 3 - Rs 5 per 50 kg bag effective from today. Sugar became sweet as some recent reports said that the government may announce sops for the sugar sector. Auto saw continued buying interest as the companies hopes that interest rates are headed down. Almost 50- 70% of sales of the auto cos comes through loans by the banks and other institutions. IT stocks were hit the most as the Indian Rupee continued to trade high against the Dollar as it was traded near one month high. Asian markets ended the day on mixed note.

Sensex ended up by 74 points at 14880.24. It is helped up by gains in ACC (1022.55,+9 percent), Guj Ambuja (129.95,+4 percent), TISCO (616.4,+3 percent), Cipla (218.45,+2 percent) and NTPC (155.35,+2 percent). Restricting the gains are ONGC (874.25,-2 percent), SBI (1563.4,-1 percent), Wipro (508.95,-1 percent), TCS (1117.25,-1 percent) and HDFC (1979.65,-1 percent).

Britannia's part owner Group Danone sold off its global Biscuits to Kraft. However the deal does not include Danones's stake in the Indian Company. There are issues yet to be sorted out. We like Britannia and we expect that the company will do well in a scenario where the playing field has been made level with the unorganized sector. The brands are strong, though there is hot competition from ITC. The stock continues to see buoyancy as expectations are that growth will be maintained and margins will be back helped by lower excise. The stock could see more gains we believe as FMCG stocks are suddenly attracting attention. The stock ended the day up by more than 1%.

Tyre sector got a boost today as major stocks rallied. The run might be because of various reasons and also in anticipation of some anti dumping on Chinese tyres. Rubber prices have slipped to Rs 75 / kg which seem to be good for the manufactures. As per some report almost 85000 CV tyres and 1.25 lac radial Car tyres were imported. Of this 70% was from China. China has now discontinued to the 5% export subsidy and also increased the freight by 20%. Apparently the Govt panel has recommended to hike anti dumping duty per truck trye to $135 from $ 99 currently. This news was delivered after market hours which is very much positive for the Indian manufacturers. Please read a detailed note on the above in our Economy and also don?t forget to read the Apollo Tyre note on which we had a call and it delivered in a day.

Technically speaking: Market closed all time high at 14880. It made intraday high of 14907.Though market ended high Decliners at 1445 outnumbered advancers at 1219. Sensex is moving towards our expected target of 14960. Support lies at 14800, 14810.

Market Close: 14746..All time high ! But..

Strong momentum in the market as buying in the Capital goods and Metal stocks fuelled the rally. Market touched its all time high of 14730 levels after a long gap. But, Indices paired of its gains as profit booking at higher levels pulled it down. Banking, FMCG, IT and Oil & Gas went for profit booking. Sensex slipped into red zone at final trade but managed to end in green. Cement stocks witnessed selling pressure after good rally last week. Auto stocks cames out with their Monthly sales number. Maruti was the top gainers. Midcaps and Small caps were buzzing today but also witnessed the selling pressure. Global cues had nothing to support as Asia traded mixed, while Europe trading in red.

Sensex ended up by 14 points at 14664.26. It was helped up by gains in Maruti (771.35,+4 percent), Ranbaxy (364.7,+3 percent), RCVL (529.7,+2 percent), Tata Motors (684.05,+2 percent) and L & T (2234.8999,+2 percent). Restricting the gains were Guj Ambuja (122.45,-2 percent), TCS (1134.6,-1 percent), Wipro (512.75,-1 percent), Hindalco (158.45,-1 percent) and RIL (1684.5,-1 percent).

Auto stocks traded mixed. Car major Maruti reported good sales figures for the month June which were in line with the market expectations. The company's sales were up 24% YoY. The company sold 56,000 units in the domestic market, up 25.5% YoY from 44,626 units in June 2006. It has exported around 3,917 units in June, which were up 3% YoY. The company had ramped its presence in the non-European countries leading to the rise in exports. Utility Major Mahindra & Mahindra also reported Fantastic growth with 52 % jump in June month to 17,816 units from 11,709 units sold a year earlier. Its domestic auto sales including utility vehicles, light commercial vehicles and three-wheelers surged by 50 % to 16,814 units from 11,178 units. 2389 units of its new car Renault's no-frills Logan sedan in June and the exports rose by 89 % to 1,002 units. And also sold 10,089 tractors in June which was down 3 %. Maruti (+4%) and MNM (+1.5%) rallied. TVS, Bajaj Auto and Hero Honda numbers were not up to markas all traded weak.

Prathiba Industries reported that the company had secured two contracts from Indore Municipal Corporation for two water supply schemes. The total value of the contracts is almost Rs 98 crore. The project is to be executed in 12 to 18 months. Some days back the company had also secured a contract worth Rs 27 crore from Jabalpur Municipal Corporation for a water supply scheme. The project is to be executed in 24 months. The company is engaged in infrastructure business with focus on the water segment and the company also expertise in building and developing infrastructure projects for water-supply and distribution system. The company has also passed a special resolution was for issue of securities by way of ADR/GDR not exceeding $25 million. We have a quickies call here and its rocking as it got locked up in upper circuit.

Technical Speaking: Momentom has Pushed up sensex to new high at 14746 levels. Sensex touched an intraday high of 14746 levels and low of 14639 levels. Volumes were good as the market churned Rs. 4303 Cr. Overall breadth was in favor of Advances, where the Advancers were 1490 against 1163 Decliners. As we have been telling for sometime now that the trend is up and we are mostly likely to make a new high on Sensex, a new high was made today. Some signals of worry today as we could not close above previous high. The sentiment is still bullish but caution should be taken and fresh entry should be avoided if Sensex goes below 14550. Market is extremely bullish & money flows are strong which keeps good support.

Close: All eyes on Tech now ! Can they create history ?

Ups and down in the market for the week with volatile Global cues along with F&O settlement provided a recipe for a vvolatile week and tats what it lived up to its name. Market recovered in the last trading sessions of the week.. Economy and Inflation fear made indices shiver globally and subprime mortgage issues in the US also kept sentiments negative earlier in the week. Fed met yesterday to discuss on interest rate..as expected it kept interest rate unchanged but stated that outlook on economy as more or less the same. Near uncertainly about the US economy remains and the possibility of an interest rate cut in US has diminished. Cement was the real gainer this week as an interview of the FM indicated that he was not for any interference on cement companies. Sugar was up on sops talk from a UP budget but we really cant say. Banking was another winner. Inflation has touched the RBI targets and that is some comfort. The credit demand also seems to be cooling. Rupee was ranged but stiill strong though a spike to Re 41 kindled hopes for the IT sector which were short lived. IT was ranged.too.

Reliance was a bit weak for the week. There were reports which suggested that the value of the gas in the current arrangement would be less by 1/3rd the original estimates which implies a big downside. This was the biggest X factor for the Reliance but now things seem bit difficult for sustained gains unless this uncertainty is done away with. There is now scope for litigation and certainly thats unlikely to be liked.

This month textiles stocks were under pressure.. as strong rupee is expected to have adversely affected the textile exporters. The cotton textile exporters had all along worked on a 5 % margin and the rupee's appreciation nearly 12 % against the US dollar has therefore pushed the exporters in the red. The Govt. is looking to make life a bit easier here.

Tyres saw some interest Rubber prices have cooled off to below Rs.80 / kg. The tyre companies are not likely to lower the prices. However, slowdown from OEM demand is a worry. We are positive on the sector. Apollo, JK, Balkrishna are our picks. Ceat has another reason to be bullish and this stems from its restructuring. These are good investment plays.

Finance Minister is an interview clarified that Govt. never tried to control cement price neither do it intend to do. Monsoon is lean season for cement..however no weakness is witnessed here. Kesoram and Century were the big winners. Actually the reason was ownership transfer of BK Birla group companies to KK Birla group. The Aditya Bilra group would emerge as the largest entity along with Grasim and Ultratech.

Banks were in action and deals. IDBI sold its 2% stake in NSE for Rs.200crs. Bank Of Baroda also sold its 0.9% stake in NSE for Rs.906.5crs to Citi. Govt. made part payment for SBI stake to RBI..part payment will be made today. Inflation is under controls and that is good sign. All ended up.

Jet came out with results and some action was seen here. The management said that the industry is in consolidation mode. After the acquisition of Jet-Sahara, Air India-Indian and Kingfisher-Air Deccan..These three players will have around 80% of market share. Air Deccan has taken lead in leveraging itself by the acquisition. The company has already passed on congestion surcharge to passengers and intends to improve its yield by Rs.500 which means 10% upsides in passenger fare. Others would follow this trend soon. This indicates some confidence in the industry. Jet would encourage Sahara as Jet lite (LCC) to compete Air Deccan. Management also indicated that Sahara would turn profitable by Oct 2007. Air Deccan also changed its strategy. The Rs.1 to Rs.99 tickets now will be used to penetrate the virgin market whereas fares will be normal for regular airline passengers. Sees to be a good strategy but smacks of lesser competition. With consolidation in the industry pricing power would be in the hands of Airlines. We think Spice offers a good proposition.

Opto Circuits has announced a 1:1 bonus. There was a buy report on Opto circuits from a couple of brokerage houses and the stock rallied. However we read some interesting notes on Stents which were not heartening. One talked of a development of the biodegradable stent which won a prize and seems to be the future and there was another about Boston Scientific which is a big player in this. "Boston Scientific's problem with its huge drug-coated stent business has become so severe that the company is looking at selling some of its assets. The stents have been blamed for clotting and heart problems in a number of patients." That?s something to worry about . Opto has some saving grace that it has a stent for restenting earlier stents.. but the risks are high. The company will be spending a bomb to get the USFDA approval. Valuations do not leave too much room here though is electronic sensors business is one which is promising in terms of risk profile.

Zinc prices crashed 4% over the week. Impact of this was seen on Eveready which struggled on the back of lower offtakes. There was a coverage on Eveready by First global recently which talks about the property sale trigger. With Zinc now at $ 3400, the profitability of this company will increase. Zinc at below $ 3000 would have this stock at least double from here. The way we speak it may appear as if this is a reverse play on Zinc . Its not. The company has a distribution network to beat that of Colgate,. It has manufacturing strengths in batteries and a brand that is extremely strong. More efficient torches may appear a threat but the Management does not believe so. The per capita consumption of batteries is still less than one fifth of other countries such as Pakistan informs the management leaving strong scope for growth. The company is working to capitalize this distribution business and benefit from excise free manufacturing of batteries. Long term is good.. but short term stock performance will be dictated by Zinc prices.

Austin Engineering the manufacturer of specialty bearings reported good results for the Q4 and FY2006-07. EBITDA margins improved by 400 bps despite higher exports (up 47% for the year). The rupee was strong and that would have bit into margins as well. Valuations and future seems to be good, the only risk in the business is slow down globally and appreciating Rupee could impact on company?s revenues. We are positive on this company and the lack of interest is because of its small size, and hence lack of analyst following. Of course we would have liked the management to be a bit more aggressive given the current opportunities and their skills.

Zen Tech a company into manufacturer of high-end multimedia weapons simulator for security forces. The numbers were fantastic. It makes money only in the last quarter. A large order was being talked off for simulation but that would take another year we guess. Astra Micro continued to rally and also other defense related stocks such as Bharat Electronics. Interesting to note that there had been an offset policy for defense which came in place last year. As per this MNC defense companies have to outsource at least one third of the order from Indian companies. Interesting to read that so far only one offset contract has been awarded: a $55 million deal to buy medium-powered aircraft radar sets from Israel?s Elta, which has agreed to buy one-third of its parts from local firms. Astra is the big one in Radar and there were talks of the order from Elta but nothing got confirmed. HBL Power systems also attempted to enter here. Keep watching we will update you more.

Greenply is another stock which we are bullish on and the stock did well which trade at its all time of 166 levels.

Going ahead we are ending on a positive note and that also is near the all time highs. Can we break that. Well its results time and the tech stocks will be the ones to report. The tech stocks have been the laggards and they will set the tone for the near term. If they positively surprise in terms of guidance then we are headed for new highs. The numbers may be good but its the guidance about the growth and the competitiveness with a strong rupee of course. So its the tech stocks where the hopes will be placed on. The banks have rallied and we dont think that they could do much more from here. Crude at close to $ 70 is certainly something which will have the investors worried. We think markets will be ranged but clearly the ideas will run.