Market Close: Ends on new high, so whats next??

After yesterday historic rally, the euphoria in the market continued today also. It was one more fantastic day for Indian markets as well as the investors. Fears of a major rift between ruling UPA and the Left parties have eased to an extent and also the strong global cues fueled the Indian indices to open on higher note and continue the rally. Investors are riding high with expectations of robust corporate earnings which have just started. Investor did opted for profit booking at the higher levels but buying intensified as sensex traded at all time high. First the sugar sector rocked with some positive news from the government and then the rally was continued by the IT sector. Capital goods, Banking, Realty and Metal stocks surged and ended higher with Auto stocks being out of favor. Besides some positive developments on the home front a steady trend in the global markets and the seemingly endless appetite of the FII Fund flows keeping market up.

IT sector surged up as the IT big boss Infosys is going to announce the results. Ahead of better results and guidance the IT stocks cheered the day. Expectations have started riding ahead of the results with many analyst expecting growth of almost 8.4% on the topline and about 2.4% on the net profit. But the main watch is on the guidance this is the strongest quarter for the comapny and also increase their guidance. Lets wait and see what the big daddy has to give the market. Will it surprise or make investors unhappy.. well we have to wait for tommorow. Mid and Small caps under performered compared to front line indices. Asian markets ended in green, currently European markets trading in green.

Sensex closed up by 378 points at 18658.25. It was helped up by gains in L & T (3372,+7 percent), BHEL (2330.6499,+4 percent), Hindalco (170.3,+4 percent), Infosys (2124.55,+4 percent) and ACC (1218.15,+4 percent). Restricting the gains were Dr Reddys (633.15,-1 percent), Bajaj Auto (2620.95,-1 percent), Ranbaxy (424.8,0 percent), Maruti (1101.05,0 percent) and ITC (184.05,0 percent).

Government announced that a slew of measures including subsidized loans to sugar mills to help those to clear dues of farmers besides making mandatory the blending of 5 % ethanol in petrol. As per some reports, Oil refiners will sell gasoline with 5 % ethanol starting this month. The government has also extended the export incentives of as much as 1,450 rupees ($37) a ton to sugar exporters by one year. Also putting fuels to it was that the Cabinet Committee gave its approval for providing loans to sugar mills from the banks under special guidelines. They would be entitled to loans of an amount equivalent to central excise duty paid by them. The mandatory blending of ethanol will create an assured market for the sugar makers and help them boost earnings even if the sugar market is unbalanced. The Indian sugar industry is facing its worst crisis, due to higher supply of sugar. Most companies have incurred losses in the last two quarters. The decision would bring some relief to the industry. This was cheered by the sugar companies as they opened up over 18% each at the start and also ended high with some profit booking seen in some of teh stocks.

Solar Explosives Limited (SEL) a part of Solar Group started manufacturing Slurry Explosives in the year 1996-97. It also manufactures Detonators and Detonator components through Economic Explosives Limited and Solar Components Private Limited. The Group started manufacturing Bulk Explosives through wholly owned subsidiary Solar Capitals Limited in the year 2000. With a Licensed Capacity of 2 lac tone Explosives (Bulk and Packaged), 140 Million numbers of Detonators and 20 Million Meters of Detonating Cord, it is one of the largest suppliers of Packaged Explosives in India. Recently the company had announced that it would be merging one of its subsidiaries. SEL has three subsidiaries "Economic Explosives Ltd, Solar Capitals Ltd and Solar Components Private Ltd." Solar Capitals which manufactures bulk explosives and has 5 plants and 7 transfer plants will get merged with SEL. The remaining subsidiaries would also merge with each other which are manufacturing detonators and the accessories. The company had recently announced that it had bagged orders from CIL and some are also in pipeline. With the increasing allocation of coal fields to private sectors, the demand for explosives will continue to grow. Solar Explosive is the best bet in this sector. The stock rallied ahead of result; we will update more on results soon.

Software solutions provider, iGate Global Solutions posted over two fold increase in net profit at Rs 24 cr for the quarter ended September 30, compared with Rs 11 cr for the same quarter last year. The total income of the company increased by 2% to Rs 191 cr for the quarter ended September 30, from Rs 187 cr for the corresponding quarter a year ago. But if seen on a qoq basis then the topline has been flat. It has been a good quarter for the company in terms of margins. The EBDITA has expanded by 260 bps (q-o-q) in this quarter. The company has added three new clients during the three months period of the second quarter. Offshore volume contribution stood at 78% in Q2FY08, which was higher as against 72% in Q2FY07. The combined usage rate also climbed to 75%. The company stated that its parent, US-based iGATE Corp, has decided to delist the company shares from the Indian bourses. But, the delisting is subject to shareholders approval and a regulatory authorization. Igate Corp.'s has to increase its holding in the unit to more than 90% from the current 81% to get it de listed. If fulfilled, the purchase of these shares will be done in line with SEBI rule via a shareowner-led reverse book building process.