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.