Market Close: bouyancy in the air !

On the last day of month indices traded weak at the start on negative global cues and more of lack of positive triggers. ICICI equity dilution along with its unimpressive results disappointed investors. This is a holiday shortened week with markets closed for 2 dats. Investors tend to play safe in such times. However markets managed to see recovery in late trading session to end flat. Last hour recovery was largely led by Reliance communication post is 4Q numbers. RIL also led to some recovery at the end. Selective mid and small caps outperformed for the day. Some economic worries seems to be hovering global markets we really needs to wait and watch how they pan out.

Sensex closed down by 36 points at 13872.37. Weighing on the Sensex were losses in ICICI Bk (865.9,-7 percent), HLL (199.4,-5 percent), Cipla (210.85,-3 percent), ONGC (911.9,-2 percent) and Bharti Tele (812.05,-2 percent). Losses were restricted by gains in RCVL (477.1,+4 percent), TCS (1265.7,+3 percent), Hero Honda (683.6,+2 percent), TISCO (549.6,+2 percent) and Infosys (2049.3501,+2 percent).

Reliance Communication declared excellent results for Q4FY07 results. Net profits jumped 154% to Rs 1,023 crore from Rs 403 crore in same period of last financial year and revenues up by 32.5% to Rs 3,936 crore versus Rs 2,970 crore. For quarter-on-quarter, it has posted net profit of Rs 1,023 crore versus Rs 924 crore, a growth of 10.7% and revenues of Rs 3,936 crore compared to Rs 3,755 crore in previous quarters, up by 4.8%. R Com?s Q4 EBITDA stood at Rs 1,635 crore and margin at 41.5%. Wireless margins in the fourth quarter were at 39%, global business margins at 24% and enterprise business margins at 49%. For FY07, the company has reported net profit of Rs 3,163 crore and revenues of Rs 14,468 crore. The results were above market expectation. The Telecom stocks ended in strong except few stocks. R Com closed up by 3.35% while its peer Bharti and MTNL closed down by 1.36% and 1.92%. VSNL and Tata Tele closed up by 1.3% and 7.79% respectively.

Hindustan Lever has posted healthy results for the quarter ended March 07. The company posted net profits of Rs 393 cr for the March end quarter against Rs 443 cr for the quarter previous year, up 7%. Total Income for the quarter increased by 14% and stood at Rs 3275 cr against Rs 2867 cr in the same quarter previous year. The results were not comparable to the extent of amalgamation of Modern Foods (India) Ltd and its subsidiary with the Company. Consumer goods ended in mixed while HLL closed down by 4.84% and its peer P&G also closed marginally down. Competition is high and with the need of stronger advertising and promodtion costs needed to drive growth markets seem to sense tougher times ahead on increased advertising costs. All media companies saw bouyancy. HT has announced a hike in advertising rates and that indicates tough times for FMCG companies.

Wipro is planning to set up an IT park in Nagpur at a new special economic zone (SEZ) near Multi-modal International Hub Airport (Mihan). The company informed that have acquired 117 acres of land by making a 20% upfront payment to the Maharashtra Airport Development Company (MADC). Wipro is believed to start a software development centre and will further consider expanding its other businesses such as business process outsourcing (BPO), business process management and knowledge services. The company has set a target of 1.5 - 2 years for the IT Park at Mihan to get operational. Earlier, MADC allotted 100 acres each to Satyam Computer Systems and Shapoorji Pallonji & Co, and 120 acres to L&T Infocity for setting up IT parks at Mihan. Software stocks ended in strong while Wipro closed marginally up and its peer Infosys and TCS closed up by 2.5%. The reason for the strength was a weaker rupee which was up on the RBI increasing the limits for MSS (Monetory stabilisation system) resources to 110000 cr. The RBI seems to have indicated that its ready to intervene after having waited out for 3 weeks.

Technically Speaking: It was a weak session for the whole day before closing. Sensex touched intraday high of 13901 and low of 13693. The Sensex has moved into a corrective phase but we believe the downside will be capped at around 13590-13600. On the higher side Resistance lies at 14075, 14190 levels, Support lies at 13757, 13621 levels. Market turnover was pretty low at Rs 3255 cr. Overall breadth was in favor of Advances, where the Advances stood at 1426, Declines stood at 1061.