Market Close: Some consolidation but 19k is near !

There seems to be no stopping for the bull run which the market has been witnessing. Liquidity inflow is so strong that investors tend to ignore negative news and participate in bulls run. Indices opened on a fair note with less support from the mixed global cues. In the early sessions itself the investors booked profits heavily at the high levels which bought in the volatility. Indices swung both the sides between positive and negative zone with no clear direction. IT pivotals were major losers after unimpressive results and guidance by Infosys. Market struggled to keep up the gains till the mid sessions but steady buying in other sectors kept the momentum up as the markets ended near all time high. Nifty crossed 5500 mark for the first time.

Today the Bank of Japan (BoJ) reported that it would keep the interest rates unchanged at 0.5% which saw some rally in the Asian markets. Hang Seng for the first time crossed the 29000 mark. Capital goods, Metal, Auto and Realty stocks extended their gains and took Sensex to a new high. Mid cap and small cap indices outperformed the front liners. If the market continues to rally in the same way then 19k is on cards. Sensex can see some correction but if results are good mid caps may see rally.

Sensex ended the day up by 156 points at 18814.07. It was helped up by gains in ONGC (1066.45,+6 percent), Grasim (3800.3999,+4 percent), BHEL (2421.2,+4 percent), ACC (1260.3,+3 percent) and L & T (3486.6499,+3 percent). Restricting the gains were Satyam (447.95,-7 percent), Infosys (1976,-7 percent), TCS (1071.9,-5 percent), Wipro (488.1,-3 percent) and Cipla (191.05,-1 percent).
Navneet, the education company has finally made a big entry into the e-education space which was dominated by Educomp. In a matter of 3 months the company has developed the animated software which covers the school syllabus for 1st ? 10th for the state of Gujarat. This it has already launched and has more than 50 schools to its credit. The pricing policy is penetrative at Rs 25000 for the full licence for the school per annum. This is set to change the paradigm set by Educomp. The low pricing really has the schools willing to buy and use the same in the audio Video room. Navneet believes that in an environment driven by marks, a product which helps the student score higher markets will be a winner. Near term the results for the September quarter should be good helped by the spillover effect from the previous quarter sales. We are really bullish on this one as it provides tuff competition to Educomp which has become too expensive but still is the market leader. Navneet has along way to go but we see that the company has the potential to deliver. We have our call on Navneet running which is now on the verge to deliver. The stock was almost 8% up.

IT People surged almost 10% after the board of the company approved the proposal to issue up to 75 lakh share warrants to either foreign investors or mutual funds or corporate bodies. The board also authorised the company to raise up to Rs 100 crore by issuing equity shares, warrants, FCCBs, or even borrow from banks/financial institutions. The company wanted to raise the money for funding the acquisition, also to set up new offices at various locations and for advertising itself as recruitment solutions provider. The company earlier in August 2007 had withdrawn its follow on public issue (FPO) to raise around Rs 45.25 crore due to lack of response from the retail investors. Recently the company acquired 100% stake in Marketplace Technologies (MT). MT is an established player in e-enabling the businesses in financial services sectors having similar products that to Financial Technologies. Its totally different area of operations for IT people as they provide recruitment solutions to the IT and ITES industry globally through a recruitment portal. But the potential of MT?s business is seen high with good growth and would one could see the upsides from this.

The demand for explosives is directly linked to the growth in mining and infrastructure sector. Demand for explosives is more in Coal mining, Infrastructure development and Metal mining. Mining industry is expected to grow in the core segments like coal, iron ore, and limestone. Coal mining remains the largest application for Explosives worldwide accounting for almost 70% of total explosive consumption. 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 as the industry has a huge entry barrier for the new player as it?s a licensed industry where you have to procure license for producing, transportation and can sell to sell only to those company having a license. Specialized knowledge on the kind of explosive and the right combination needed for kind of rocks gives Solar the extra edge. The company had recently announced that it had bagged orders from CIL and some are also in pipeline. The stock has rallied ahead of result; we will update more on results soon. Do read the note on the same for a better view.

Technically Speaking: Market traded the whole day with volatile session but finally ending the day up by more than 150 points as buying intensified in the last sessions. Sensex touched intraday high of 18833 and low of 18537. Overall breadth was marginally in favor of Declines, where the Declines stood at 1363, while Advances at 1349. High volumes have been noticed over past week but today it broke all the records. The market churned an astonishing Rs 10545 crores. It shows that there is a huge liquidity inflow from foreign as well as domestically. Sensex is marching up with some huge volumes. Traders can take longs keeping a stoploss of 18300 on Sensex.