Market Close: Recovery post CRR hike !

All eyes were on RBI's meet as it was supposed to decide on liquidity tightening. That kept the indices ranged and negative biased till the decision of CRR hike was announced by the RBI. Global markets bounced back today and India followed the same trend. But as soon as RBI announced CRR hike market indices took a dip. However, buying at lower levels across major sectoral indices in the final trading hours helped to offset the negatives on CRR hike. However we believe that the impact will be seen gradually. The major gainers for the day were on the Banking, Consumer Goods, Metals and Reality counters. Small and mid caps were also able to attract buyers. Europe was in green.

Banks have already reported a slowdown in the credit off take because of higher lending rates?CRR will further bring it down. We believe that the impact of the CRR hike would also continue to impact the corporate Indian on account of higher rates. We expect the fuel prices in the country to be hiked in the next few weeks because of higher crude prices. That would further add to the inflation. Let see how CRR hike helps to control inflation. We will bring more updates here for you..Keep watching this space.

Sensex was by 307 points at 15567.89. It was helped up by gains in HDFC (2006.5,+5 percent), L & T (2568,+5 percent), BHEL (1720,+5 percent), ACC (1057.7,+3 percent) and Ranbaxy (388.75,+3 percent). Restricting the gains were Maruti (831.05,-2 percent), Hero Honda (674.95,-2 percent), Tata Motors (699.9,-1 percent), HLL (206.8,-1 percent) and Infosys (1973.25,-1 percent).

Larsen & Toubro was one of the major gainers for the day. Company?s net profit for the June ended quarter was at Rs.377 cr vs Rs.157 cr, up by 140%. Net sales for the quarter were at Rs.4505 cr vs Rs.3469 cr, up by 30%. Company bagged orders to the tune of Rs.3,445 cr in the month of July itself. We believe that the company is well placed in the industry. Order book is large and it will continue to bag more orders. Valuations are high and growth as well !

Ceat delivered good set of numbers for the quarter June. The top line witnessed a growth of 8% YoY. The EBIDTA for the quarter was up by 248% to Rs.64 cr?thanks to lower rubber prices. The bottom line stood at Rs.30 cr against Rs.0.23 cr in the same quarter previous year. The proximity to the OEM?s (Original Equipment Manufacturers) which had witnessed a slow down in the last quarter which impacted the top line growth for the quarter. The revenues from the OEM?s were down by 10% while that from the replacement market were higher by 12%. We believe that other players are better placed in the industry compared to Ceat. Do read our note on the company to be published shortly for that.

Everest Kanto Cylinders (EKC) the largest manufacturer of CNG cylinders in the country ended 4% higher for the day. 60% of EKC's production goes to retrofitters and 25% to OEM. Demand and supply gap has made company enjoy huge profits and things will continue to be the same for next few years. CNG is more economical as compared to petrol...so high crude may force more people to go for CNG. Govt. ruling is also helping. But we are not a buyer ! Do read our note to know more.

Technically Speaking: Indices rallied after RBI?s CRR hike news. Sensex made high of 15569 and low of 15225. Advances were much ahead of Declines in the ratio 1.7:1.Sensex churned a turnover of Rs 5255Cr. VJ stood to the stand that markets will test 15500 after the fall during midday. Markets bounced back as per the reading of VJ and closed above 15500.