Close: Sensex Breaks out of the shackles. !

It was a weak of strong gains for the Sensex as it took cues from the global and rallied strongly. Sensex ended up 3.89% at over 13904 levels helped by value buying across board. It was a great week really.

The Infosys results positive impact carried over on Monday as well and TCS too delivered good numbers. We had a derating note on Infosys and it was really a market underperformer. So also the other software stocks. However it was HCL Tech which created ripples with spectacular numbers. However, it was the strong rupee which was the talk of the town. Everyone seemed concerned on the fact that the FM believed that the rupee was competitive. The RBI did not intervene so really the balance between the rupee and excessive liquidity. The software sector continues to remain weak and this in the face of an appreciating rupee. The Rupee is near Rs 42.7 to a dollar which is a 9 year high. Weakness in the dollar continues.

The US markets made record highs amidst even negative news. The caution there is that Nasdaq has not made new highs which normally has been the case. Asian Markets have been rallying and they are near record highs.

Monsoons are expected to be near normal this year says the Met department. However its disappointing to note that the track record of the Met department is no where near good. So not much weightage can be given to this.

Inflation numbers came in at over 6% this week yet again and that troubled the market a bit. However it was taken as a blip and we would work more on it to give you our comments.

As for Market performance of the markets this week. The Mid caps have started delivering. Sensex was up 4%, Nifty up 4.2%, Mid caps up 2.7%, Small cap up 3.3%, BSE Bank index up 4%. The Metal stocks were up on the back of increased steel prices though Tisco rights pricing brought in a shock in terms of the dilution. The Telecom stocks were big winners. Thats a growth sector really. However the one man show was Reliance. The plans about its Gas exploration and also the gas find is whats keeping the stock moving just one way. Its unbelieveable to understand the kind of profits that it makes even in tough times. The software stocks were weak. The Cement stocks came in for profit taking post the results as was indicated in our note expectations. topnew.gif (1104 bytes)

Research panning out across our services and showing that research pays !

We booked wow calls in SKF bearings. We had a research note on it recently. The numbers are expected next week and there seems to be increased interest as the increased capacities will deliver higher profits. The company caters largely to the auto sector but the more interesting part is that its the replacement market where it is well placed with higher margins. SKF Sweden is converting India to a good sourcing base and the benefits of that are getting priced in. Do read our research on this one. Wow call here delivered over 25% over last 2 months. Results are slated

This week we booked gains in Honda Siel. Honda Siel is a Genset manufacturing company and is a subsidiary of Honda Japan. Its a small cap company. However the exciting part is that the poor power situation in the country is creating demand and more than that the need for portable power in the fields and other applications is whats driving up the revenues. The company has a couple of new product launches using LPG and thats another trigger which should bring in the growth. The company has Rs 75 cash per share and that makes is a good dividend candidate.

We booked gains in India Cements. The results were good helped by lower taxes. Apparently accumulated losses are high. The company continues to sell in all placed at over Rs 210 in most regions. The results analysis will be put out on Monday. Do have a look. This is one company which will have the benefit of its expansions coming in ahead of the others.

There was a Delivery delight call in Siemens. Wow adonis hit it bingo giving a short call and the stock was smashed. We believe that the company may not be able to live upto expectations of performance. The March quarter margins were expected to be under pressure and the appreciating rupee is expected to further aggravate that as a big business this quarter was to be from Qatar which was dollar denominated. Results are slated for Monday. We had a technical chart on this as well. Do see the same.

We closed a call on Alfa laval with super 10% + gains. The parent has an open offer on at Rs 875. Surely the process equipment manufacturing company has reason to expect a higher bid given the opportunity globally. Need for ethanol processing and other process equipment is high and where else but a low cost manufacturing base is where it should be got from. The Parent has denied any hike in offer prices... but eventually it would do that. Thats a small cost to pay for this opportunity.

Sensex churned good turnover of Rs 4301 crs. Sensex Support lies at 13760 and Resistance at 13988. Direction look the same upwards and looking for 14275. Next week is the RBI meeting on April 24th and thats unlikely to throw in any negative surprise. We dont expect any CRR hike.. but latest inflation figures have increased chances of a rate hike by 10%. The results are flowing in thick and fast and next week will see even more.