Market Close: Nearing 14390 our target But..

As VJ mentioned in Technicals that Sensex will see 14390 levels and it did. Indices opened Firm with Global support and surged higher in the early sessions. Indices shredded its early gains as investors were cautious about the FNO expiry and the much awaited result of RIL preferred to book profits at high levels. Market traded ranged but in green throughout the day. As the final hour of trade proceeded, markets became volatile swinging in both direction but eventually ended flat in green. Petroleum stocks were on fire in the later half on news that Committee may call for duty cuts on petroleum products. RIL which surged to its day high in early trade lost its ground after the mid sessions as investors were impatiently waiting for the biggie to announce its results. RIL did annouce its results but after the market hours which were good and above the market expectations. Engineering and selective Energy and Pharma stocks found interest from the investors but selling pressure was seen across the board with Cement and Banking stocks taking the major hit. Asian indices closed firm while the European indices are trading in green.

The Indian Rupee rose as high as 40.71 per Dollar in the early trades but it last traded at 40.90 a Dollar. Rupee rallied for past few days below 41 for the first time in nine years. and also rose by almost 8.4% against the Dollar this year, including a massive increase of about 3% in the past week. The central government is not intervening as of now as it wants to keep the inflation level below 6% and we expect the government to take some action by tommorow or by Monday. Inflation data is due tommorow and it is expected to come at 5.7%.

Sensex closed up by 11 points at 14228.88. It was helped up by gains in Grasim (2498.3999,+2 percent), Bajaj Auto (2491.3,+2 percent), HLL (214.7,+2 percent), TCS (1239.5,+2 percent) and Wipro (563.1,+1 percent). Restricting the gains were TISCO (560.45,-2 percent), Satyam (460.25,-1 percent), ONGC (960.35,-1 percent), Rel Energy (517.35,-1 percent) and Guj Ambuja (119.15,-1 percent).

Reliance Industries has once again come out with surprising quarterly result wherein the company posted Q4 FY2007 Net Profit of Rs 2853 cr vs Rs 2502 cr, up by 20.3% on yoy basis. Its Net Income was at Rs 25895 cr vs Rs 24542 cr on yoy basis. The Q4 Gross Refinery margins hits USD 13/bbl vs USD 11.30/bbl in previous quarter of same fiscal. Its Q4 EPS was at Rs 20.50 and Q4 EBITDA Margin was at 18.1%. The company posted refining margin in Q4 at 10.8% versus 8.2% yoy. Its Petchem margin in the corresponding quarters were at 10.7% vs 12.1% yoy. Q4 Petchem revenues for the company were up 48.2% at Rs 10,670 Cr and refining revenues was also up 37.5% at Rs 29,069 cr. Its other expenditure in Q4 was at Rs 2434 cr vs Rs 3102 cr on yoy. The results were above market expectations.

SKF India the leader in global bearing industry as well as in Indian markets has delivered good results for the Q1 FY07. The company has registered Net profit of Rs 36.6 cr versus Rs 22.5 cr in the corresponding quarter previous year. The revenues were enhanced by 22% to Rs 360 cr on yoy basis. The operating margins stood at 17%. The company has announced the capex plan of Rs 150 cr in Uttarakhand. SKF has planned to set up a new manufacturing site in Haridwar, Uttarakhand. The new bearing factory is likely to increase the existing ball bearing capacity by more than 1/3rd fuelling the growing demand in the booming automotive and other key manufacturing sectors. The state of the art plant will be operational in March 2008 and is likely to employ over 300 people. SKF is very positive about the economic development in the country. Uttarakhand is an emerging industrial hub within the country. SKF?s strategic move to increase production capacity through the Haridwar plant signifies SKF's commitment not only to serve their customers effectively but also reinforces their leadership position in the Indian Subcontinent.

Ceat Tyres is likely to outsource tyres from China and Vietnam for sales in India. Ceat joined hands with two Chinese firms to outsource truck and bus radials. Earlier, the company had imported 100 odd tyres for quality and durability clinic tests for a six-month period. The company has been importing truck and bus radials from Pirelli's facilities in Egypt and Turkey. With import of tyres from China, the company decided to create two brands in the commercial vehicle tyre segment, to avoid cannibalization of the brands. The Chinese tyres will be branded as the 'Economy' range while the Pirelli tyres would be branded as 'Premium' range. The company has started importing OTR tyres (specific range) from Vietnam that will be further tested, on the basis of market feedback. At present the outsourcing of tyres (imports and local outsourcing) accounts to 20% of the company's total revenue and is likely to touch 25%, this fiscal. The growth is backed largely by the rupee appreciation and lack of a diverse tyre range in the domestic market. Tyre is not a branding business specifically for the Commercial segment where the products need to be self manufactured and catered to specifically to specific market conditions. This is not a good long term strategy for the CVs as the company would need to invest into manufacturing sooner or later. All tyre companies are seeing good interest. The tyre stocks closed in red, Ceat ended down by 4% and its peer Good year and Apollo ended down by 9.65% and 1.5% resp. but MRF managed to close up.

Technically Speaking: Expiry kept market ranged after strong opening. Sensex touched intraday high of 14383 and low of 14127. Sensex has almost reached our target of 14390, just short of 6 points. Immediate support is at 14075 and resistance at 14320. Market turnover stood at Rs 4465 cr. Overall breadth was in favor of Decliners where the Advancers stood at 1096, Decliners stood at 1473.