Market Close: Nose dives ahead of Fed meet !

As expected Indian market bounced with global market and rally was seen across the board. Investor participation helped the market to maintain the momentum for a while after start. But as the day advanced market found it difficult to sustain the rally. Some stock specific action was seen in small and mid caps. Auto, and Technology stocks bounced back smartly as this both counters seems to be oversold. Aviation counter also took off on lower crude prices. ICICI and ITC actually dragged the market. ICICI announced deposit rate revision. However some recover was seen in bank counter?but credit off take seems to be lower than deposit growth rate which is weighing on banks. Unconfirmed reports indicating slow down in cigarette sales for the month of July hammered ITC.

Now all Eyes ogle on Fed meet in US for interest rate decision. Interest rates are expected to remain unchanged. Lets keep watch here.

Sensex closed higher by 30 points at 14932.77. It was helped up by gains in Rel Energy (764.7,+3 percent), NTPC (166.7,+2 percent), Bharti Tele (876,+2 percent), HDFC (1973.6,+2 percent) and Cipla (187.05,+1 percent). Restricting the gains were ITC (167,-3 percent), ICICI Bk (870.75,-2 percent), Bajaj Auto (2275.2,-1 percent), TISCO (642.6,-1 percent) and BHEL (1671.8,-1 percent).

Nitin Fire Protection closed high after the company signed a MOU for the supply CNG Gas Cylinders to IRAN worth Rs.65crs. The execution of the order shall be done within this current financial year. The company also received Letter of Intent form Bangladesh, U.A.E. and Domestic market for the supply of CNG Gas Cylinder worth approx Rs.25crs. It has also received the purchase order from Reliance Petro for supply of fire extinguishing systems for there refinery for Rs.7 cr. The plant at Himachal Pradesh has started operation for manufacturing of Fire Protection equipments. The demand for CNG cylinder is really big and that is what all the cylinder companies are banking on. But there are some reports which suggest that some new capacities are coming in Iran (biggest market for CNG cylinder). EKC (Everest Kanto Cylinders) is largest player here and has enjoyed huge profit on high realisation. But with additional capacity coming in market the business may not remain as lucrative as it is. We are not excited here. Do read our note on both Nitin Fire and EKC to know more.

Everonn Systems (Everonn) is in the field of education and training. The company offers a fully integrated range of services like creating knowledge resources, designing and delivering the learning and training programs through the medium of computers and other resources. The company also sets up infrastructure and delivery platform for enabling the same. The company gets its revenue from two sources i.e. Education and training which contributes almost 95% of the total revenue while the rest is from sale of hardware which is very small. Governments of various states are its key clients as almost 70% comes from them while the rest 30% are from private schools and colleges. Content is the area where the company lags behind Educomp, its arch rival in the business. We are not really convinced with the business model. Do read our note to know more.

Technically Speaking : Sensex key support seen at 14880 and 14735. If both these levels are broken, the medium term trend could also turn negative and the Sensex might slide upto 14100 and 13600. On the higher side 15240 and 15400 are key resistance.