Market Close : Booming away to glory !

Indices zoomed like a rocket in the early sessions with Sensex and Nifty hitting an all time highs. Markets weren?t affected by bad news on the US housing market. Sensex was just 50 points away from touching its 18K mark but witnessed huge volatility in mid sessions driven by profit taking in Asia. Markets plunged in the red zone on a free fall from the top. Volatility was an understatement. Markets in that period swung from green to red and back to green again. Indices slipped into red to a low of 17,288, down by 665 points from the peak but soon rebounded into the positive zone as it recovered most of its lost ground to end up by 518 points.

Asia markets ended mixed with Hang Seng down over by almost 1600 points from the day's high. Hang Seng was down over 2% as on profit taking and rumours about changing rules of foreign ownership. This selloff also impacted Indian markets and Europe too which started flat. The Power sector powered the markets. Broad market however was in the read. There was selling pressure in select Pharma and Cement stocks. Small and Mid caps had mixed reviews with the latter ending in green while the other in Red.

Sensex ended the day up by 518 points at 17847 was helped up by gains in Rel Energy (1450.4,+7 percent), Infosys (2001.4,+6 percent), NTPC (217,+5 percent), RCVL (642.65,+5 percent) and RIL (2393.55,+5 percent). Restricting the gains were Cipla (185,-2 percent), Guj Ambuja (144.95,-2 percent), HLL (220.35,-1 percent), Ranbaxy (438.6,-1 percent) and Dr Reddys (655.25,0 percent).

Cement is the one sector which has seen strength amidst all negatives. In the strong demand sceanrio many companies are increasing the price to take the advantage. ACC Ltd, India's second biggest cement producer reported that its September shipments rose 10.7% to 1.55 mn tonnes from 1.40 mn tonnes a year earlier up by 11%. Shree Cement reported its sales for the month of September at 0.47 mn tones vs 0.39 mn tones, up by 20% yoy. But unfortunately Ambuja cement sales for the month of Sept fell to 1.28 mn tones vs 1.34 mn tones, down by 5%. The reason for low shipments was that the plant had been shut down for few days in the month of September due to flood in the region. However this may not have much impact on company's bottom line. All the cement companies are reporting good sales dispatches even for the monsoon season. The demand remains robust. Valuations is where the fly in the ointment. We are positive on Kesoram Ind, Shree Cement and Madras Cement. Look for dips for investment prospects.

As per some reports, Private Low cost carriers will increase their Air fares by around Rs 100 as a result of a 4-5 % increase in ATF prices for domestic flights from this month onwards. The fuel surcharge per ticket will increase to Rs 1200 for domestic passengers from the existing Rs 1100. ATF is the main cost as it accounts for 30% - 35% of the operating cost of most major airlines. This would bring in some relief to margin for domestic airlines with low cost carriers such as Deccan Aviation and SpiceJet. There was another report stating that the Deccan Aviation would be exiting from the metro routes which would be beneficial to Spice jet and Jet airways.

Reliance Communication (RCom) announced the launch of its newest color handset priced at Rs 999. The 'Classic 732' which RCom claims to be the first color handset to be made available in the country at such a low price. The phone also features a color display and FM. Company is confident that the feature-rich Classic 732 color handset would soon become the entry-level handset for every new mobile user in the country. RCom had previously launched Classic monochrome handsets priced at Rs 777 per piece. Rcom saw gains. However competition is only increasing here.

Technically Speaking: Market zoomed in early session but had a bout of volatile session in mid sessions and finally ending the day up by more than 500 points. Sensex touched intraday high of 17953 and low of 17288. Overall breadth was in favor of Declines, where the Declines stood at 1696, while Advances at 1079. High volumes have been noticed over past week but today it broke all the records. The market churned an astonishing Rs 10024 crores. Sensex, as we have projected in our mid market, is going for 18500--18600. Traders who took entry at 17300 can now move their stop loss to 17250.