Market Close: Profit booking ahead of F&O settlement

Markets were expected to be firm on good global cues...and it met the expections. No negative cues also added to the rally. Buying kept market bouyant across the board. Howeve IT counters continued to struggle as rupee hit new highs at 40.28 against dollar. After mid sessions markets gave up its gains along with IT. Banking counter is bit strong as inflation seems to be easing. But this is the base effect really. This effect will taper off next week on till about August from when again some moderation may happen. Auto again recovered particularly M&M post results.

The rupee turned stronger against dollar and quoted at 40.53/54 and buoyed by strong trend in equity markets. Market anticipated that the RBI's intervention as the rupee neared the crucial 40.50 level. In active trade at the Interbank Foreign Exchange (forex) market the local currency resumed higher at 40.55/57 a dollar from Friday's close of 40.58/59. It was later quoted at 40.28 in the trading session. The surge of rupee was attributed to absence of dollar demand from oil companies at the month-end. Major Software stocks continued to dipdown as the rupee hitting new highs.

Sensex ends up by 59 points at 14397.89. It was helped up by gains in HDFC Bk (1125.4,+5 percent), L & T (1785.05,+3 percent), Guj Ambuja (116,+2 percent), Maruti (825,+2 percent) and Cipla (208.25,+2 percent). Restricting the gains were HLL (200.5,-1 percent), Infosys (1964.65,-1 percent), Rel Energy (550.5,-1 percent), NTPC (162.3,-1 percent) and Satyam (469,-1 percent).

Electrical equipment maker Crompton Greaves intends to acquire Ireland-based Microsol Holdings for an enterprise value of around 10.50 million Euro (over Rs 57 crore). MHL is a part of the Microsol Group and has operations in the UK, US and Ireland. It provides sub-station automation for MV and HV to new sub-station and retro-fitting solutions for existing sub-stations. This acquisition will increase the company's strengths in the area of high-end engineering and sub-station automation capabilities. Power sector is the one where huge interest lies in. Crompton Greave is well established player here. We are positive on this one. The stock surged up by 7% on this news.

Oil Companies traded week. Indian Oil Corporation (IOC) reported its consolidated net profit of Rs 7867 Cr for the year ended March 31, 2007. Total income is Rs 202692.Cr for the year ended March 31, 2007 whereas it was Rs 162798 Cr for the year ended March 31, 2006. For the quarter ended March 31, 2007, the company posted a net profit of Rs 1609 Cr for the quarter ended March 31, 2007 whereas it was Rs 4030 Cr for the quarter ended March 31, 2006. Total income for the quarter ended March 31, 2007 was Rs 55412.07 Cr whereas it was Rs 51420 Cr for the quarter ended March 31, 2006. With the merger of IBP with IOC taking effect in the current quarter (January-March 2007) the previous year's figures do not include the financials of erstwhile IBP and hence are not comparable to those of the current year. The results met the market expectations. The stock closed up by 1.5% while its peers were marginally up by 1%.

Technically Speaking: Overall market traded at higher levels but profit booking triggered at the end. Sensex touched intraday high of 14570 and low of 14368. Sensex was unable to cross the major Resistance of 14520--14530 levels. We might see continued selling pressure till the expiry. On the lower side support at 14250 and 14160. Overall market turnover stood good at Rs 4148 Cr. Market breadth was in favor of Advances, where the Advances stood at 1470, Declines stood at 1094. Market is expected trade ranged as F&O expiry week.