Kotak - ENIL

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Sharekhan Highnoon dated March 06, 2007

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Anand Rathi - Daily Fundamental Snippets - Mar 6

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IT pivotals, RIL provide springboard for the 282-point rebound

The market recouped a portion of the recent heavy losses, tracking a recovery across Asian markets. Short-covering in derivatives also played a part in today's remarkable upsurge. IT, telecom shares and leading banks edged higher. An upmove in index heavyweight Reliance Industries (RIL) provided the much-needed springboard for the sharp rebound.

The 30-share BSE Sensex jumped 282.05 points (2.2%), to settle at 12,697.09. A bout of volatility struck in afternoon trade, and the market was firm till then. A sudden sell-off later had pulled the Sensex down up to 12,427.13 by 12:56 IST, just 12.09 points higher for the day.

The S&P CNX Nifty gained 79.15 points (2.2%), to settle at 3,655.65. The Nifty March 2007 futures were at 3,644 compared to the spot Nifty closing of 3655.65.

The BSE clocked a turnover of Rs 3807 crore compared to Monday (5 March 2007)’ s Rs 3996 crore. Turnover on NSE’s futures & options segment rose to Rs 35406.27 crore from Monday’s Rs 33865.52 crore.

Asian shares recuperated from the recent steep losses, as investors struck bargains. Key benchmark indices in the Asian region rose 1% to 2%. Asian markets had declined sharply over the past few days due to worries pertaining to the US economy, volatile markets in China, and more frequently, the unwinding of yen carry trades, or when investors borrow the yen to take advantage of low interest rates in Japan, and then invest in higher-yielding assets.

As per provisional data, FIIs were net sellers to the tune of Rs 489.57 crore today. FIIs were net sellers to the tune of Rs 312.70 crore on Monday (5 March 2007), the day when the Sensex had tumbled 471 points. FIIs were net buyers to the tune of Rs 324.90 crore on Friday (2 March 2007), the day when the Sensex had lost 273 points.

Today recovery was not supported by the market-breadth. Against 1,465 shares declining on BSE, 1,105 shares declined. Just 50 shares were unchanged. Losers outpaced gainers by a ratio of 1.32:1. The BSE Small-Cap Index lost 11.23 points (0.18%), to settle at 6,259.52. BSE Mid-Cap Index rose 25.05 points (0.48%), to 5,219.45.

Among sectoral indices, BSE IT Index was the top gainer in percentage terms. It surged 231.64 points (4.9%), to 4,961.94. The BSE Oil & Gas Index surged 131.25 points (2.2%), to 6,067.22. The banking benchmark, BSE Bankex, advanced 132.24 points (2.1%), to 6,353.28. Some indices did decline. The BSE Metal Index dropped 34.37 points (0.4%), to 8,002.12. The BSE FMCG Index shed 1.73 points (0.1%), to 1,699.63.

Wipro led the rally in IT shares. The Wipro stock jumped 8% to Rs 582. IT bellwether Infosys gained 6% to Rs 2130, Satyam Computer gained 5% to Rs 435.50 and TCS advanced 3% to Rs 1198. The recent easing of the rupee triggered renewed buying for IT shares. The rupee’s fall will ease pressure on their profit-margins. The IT sector derives a lion’s share of its revenue in dollars. In early trade, the Indian rupee was at 44.550/560 per dollar, extending its move off Monday's trough of 44.695, the lowest since 21 December 2006. It had closed at 44.625/640 on Monday.

Reliance Industries (RIL) rose 3.5% to Rs 1304.05. The stock gained on bargain-hunting after a recent steep fall in the counter. RIL enjoys 11.1% weightage in the BSE Sensex.

ICICI Bank surged 4% to Rs 854. The stock enjoys 9.3% weightage in the barometer Sensex. ICICI Bank said on Saturday (2 March 2007) it plans to transfer investments in four subsidiaries to a new wholly-owned unit, ICICI Holdings, and may list the unit next year.

Cement shares came off the lower level in volatile trade. ACC surged 5.9% to Rs 861.50, Grasim gained 1.4% to Rs 2133 and Gujarat Ambuja Cements gained 1.7% to Rs 113.80. Steel shares recovered from an intra-day decline. State-run Steel Authority of India advanced 1.2% to Rs 98.20, off the session’s low of Rs 91.50. Tata Steel ended flat at Rs 421, off the session’s low of Rs 404.55.

Steel and cement shares had declined over the past few days with the government taking steps to rein in prices to combat inflation. Steel makers on Monday decided to rollback Rs 300 - Rs 700 per tonne price hike in reinforced steel. Producers have also agreed to cut prices of hot rolled coils by Rs 500 a tonne. At least two steel makers, Essar Steel and Tata Steel, had raised the price of hot rolled coils by Rs 1,000 per tonne on 1 March 2007, in line with international prices.

However, cement makers refused to roll-back a price hike, executed post-Budget, following an increase in excise duty on cement.

Bharti Airtel gained 4.7% to Rs 724. The near-term trigger for the scrip is the number of new subscriptions for February 2007. Bharti Airtel has 5.8% weightage in the Sensex.

L&T rose 3% to Rs 1427. The stock rose on bargain-hunting after a recent steep drop. L&T has benefited from the government’s thrust on infrastructure in the Union Budget for the next fiscal.

NTPC dropped nearly 3% to Rs 132.80. The board of NTPC approved a proposal for the company's foray into nuclear power generation.

Ashok Leyland jumped 5% to Rs 38.50. The company said on Tuesday vehicle sales in February rose 33% to 8,036 units from 6,038 units a year ago. Domestic sales rose 33% to 7,353 units from 5,517 units a year earlier, while exports climbed 31% to 683 from 521 units.

Aban Offshore rose 2% to Rs 1815. The company said on Tuesday its subsidiary had secured a drilling contract worth $123 million from affiliates of Canada's Addax Petroleum and China's Sinopec.

Gujarat Narmada Valley Fertilizers rose nearly 2% to Rs 95.70. As per reports, the company plans to invest Rs 750 crore in 2007/08 to convert its urea plant feedstock to natural gas, in order to improve efficiency.

Hotel Leelaventure lost nearly 3% to Rs 52. The company said on Tuesday its board would meet on 14 March 2007, to consider raising up to $110 million through various means, including foreign currency convertible bonds (FCCBs).

Gemini Communication gained 0.3% to Rs 370. The company said on Tuesday it had bagged an order worth Rs 75 crore from a state utility for computerising its collection centres.

Orchid Chemicals was volatile. The stock lost 0.3% to Rs 232. It staged a strong intra-day rebound from a 12.3% fall. The company today said its board had forfeited 10% of the share price amount paid by R Vijayalakshmi (promoter) and Dr M R Girinath (promoter group), aggregating to Rs 8.05 crore, on account of the non-conversion of the 35,60,000 share warrants into equity within the stipulated 18-months from the date of their allotment.

Micro Inks lost 35% to Rs 320. The company today reported a net loss of Rs 16.89 crore in the December 2006 quarter compared to a net profit of Rs 16.07 crore in the December 2005 quarter. Total income for the December 2006 quarter was flat at Rs 242.85 crore (Rs 242.26 crore).

Vivimed Labs lost 0.7% to Rs 178.20. The company today said it has been approved as a global supplier to L'Oreal of France.

Software firm Hexaware Technologies rose 5.1% to Rs 152.65 after 2.5 million shares, or 1.9% of the share capital, changed hands in a block deal on the BSE at Rs 148.

The major gainers among side counters were UTV Software (up 14.8% to Rs 281), MM Forgings (up 13.9% to Rs 170.90), Nalco Chemicals (up 13.7% to Rs 749), Rainbow Papers (up 13% to Rs 88.75), Gwalior Chemicals (up 12.9% to Rs 56.30), Automotive Axles (up 9.9% to Rs 599), GMM Pfaudler (up 9% to Rs 123.40), Rolta India (up 8.6% to Rs 307.50), Glenmark Pharma (up 8% to Rs 545.70), and PTC India (up 8% to Rs 58.80).

Trading on the bourses has been extended by 45 minutes till 16:15 IST due to sun outage. The extended trading hours are till 19 March 2007.

Indian stocks had tumbled in the last few days due to a sell-off in global markets, and also due to disappointment from Union Budget 2007-08 of 28 February 2007. The fall was accentuated as margin calls were triggered. The Sensex had tumbled 541 points on Budget day itself. The market had recovered the next day (on 1 March 2007) on the back of a rally in IT shares under the reckoning that their earnings will be impacted only to a small extent following an increase in tax in the Budget. The Sensex had surged 221 points, to 13,159.55 on 1 March 2007. However, a sell-off had gripped the bourses again, which saw the Sensex hurtle to 12,415.04 on 5 March 2007.

While there was no cut in the 10% corporate surcharge which the market was expecting, the dividend distribution tax was raised to 15% from 12.5%. The Budget also raised direct/indirect taxes for cement, construction and IT sectors.

A section of the market believes that the current fall offers a good buying opportunity for long-term investors. Deutsch Bank in a post-Budget report states that Bhel, Infosys, Punjab National Bank and Grasim (a high-risk, high-return play) are its top picks.

UBS shares a similar view. ‘Post the recent correction, relative valuations don’t appear as expensive as they used to be. India is now the fourth most expensive market in Asia compared to the most expensive status that it used to have about a month back’, it states in its post-Budget report. At current levels, the Sensex trades at 15.8 times 1-year forward EPS – an 8% premium over the long-term average of 14.6, the report adds.

Market ends upbeat, gains 282 points

The market appears to be back on track after slipping for the last two sessions. The market had fallen prey to the weak global indices in the past few sessions and had witnessed a major correction. The Sensex bounced in early trades on the back of the revival of buying triggered by firm Asian markets. The Sensex was up over 300 points amid strong optimism in the morning. However the bourses slipped in mid-morning trades amid considerable volatility and the Sensex shed most of its early gains to touch the day's low of 12427. The market inched up from lower levels on sustained buying in information technology, telecom and front-line stocks to touch the day's high of 12760. The Sensex closed with gains of 282 points at 12697. The Nifty added 79 points to close at 3656.

However, the breadth of the market was negative. Of the 2,578 stocks traded on the BSE, 1,451 stocks declined, 1,089 stocks advanced and 38 stocks ended unchanged. Among the sectoral indices the BSE IT Index advanced 4.90% at 4962 followed by the BSE Teck Index (up 4.07% at 3488), the BSE Oil & Gas Index (up 2.21% at 6067) and the BSE Bankex (up 2.13% at 6353). However, the BSE FMCG Index and the BSE Metal Index closed in negative territory.

Select blue chip stocks notched up significant gains. Wipro soared 8.12% at Rs581, Infosys advanced 5.47% at Rs2,116, ACC climbed 5.07% at Rs854, Satyam Computers surged 4.92% at Rs434, Bharti Airtel gained 3.98% at Rs718, ICICI Bank added 3.77% at Rs852, Reliance Industries jumped 3.19% at Rs1,229, TCS advanced 3.17% at Rs1,199, L&T gained 3.17% at Rs1,428 and SBI was up 3% at Rs991. Among the laggards Hindalco tumbled 3.02% at Rs130, NTPC dropped 2.74% at Rs133 and Hero Honda lost 2.57% at Rs667. Tata Motors, ONGC, HLL, ITC and Tata Steel ended with marginal losses.

The techs were in the limelight. Mphasis soared 5.12% at Rs258, Patni Computers jumped 2.66% at Rs415, HCL Technologies added 2.53% at Rs625, Financial Technologies advanced 1.84% at Rs1,741 and i-Flex solutions ended with moderate gains.

Over 59.87 lakh SAIL shares changed hands on the BSE followed by IDFC (51.85 lakh shares), Reliance Communications (42.50 lakh shares), Gujarat Ambuja Cement (41.32 lakh shares) and NTPC (38.48 lakh shares).

Value-wise Reliance Industries registered a turnover of Rs151 crore on the BSE followed by Reliance Communications (Rs127 crore), Infosys (Rs97 crore), Century Textile (Rs68 crore) and Tata Steel (Rs68 crore).

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Edelweiss - Daily Market Outlook 6th March, 07

Market Snapshot

The Sensex opened with a negative gap of 169 points at 12,717, and continued to drift lower. The selling pressure was so intense that the index tumbled to a low of 12,344. The index, thereafter, attempted to recover but was met with unabated selling at every rise. Heavyweights in particular bore the brunt of the selling today. The Sensex finally ended with a hefty loss of 471 points at 12,415 while the NSE Nifty settled with a loss of 150 points at 3576.5.

The NSE & BSE cash volumes were slightly lower compared to the previous day at INR 85 bn and INR 39 bn. The F&O volumes were a touch higher at INR 332 bn.

Sentiment Indicators

The Implied Volatility (IV) across Nifty strikes has increased to 32-33% levels. The WPCR of Nifty Options decreased to 0.76 compared to the previous day while the 5 day average is 0.90.

Outlook

We expect the market to open with a positive gap in line with its Asian peers. The pullback can take the Nifty up to 1.5% up from the yesterday’s close. Domestic mutual funds are expected to buy select heavy weight stocks at the current levels as most of the fund houses are sitting on significant pool of cash. However, the tone of caution still pervades amongst the investors and they might look to sell off their positions after a rise.

The last couple of days have seen a significant buildup in Nifty OI as compared to SSF OI. This underlines the cautious tone in the market as investors prefer to take positions in broader instruments like the index as a hedge to their long positions.

We recommend the investors to invest in large caps like Infosys, Bharti, RCOM, and ICICI bank since these stocks can lead the pullback rally.

The Nifty took a support at it’s 200 DMA at 3562. Further the Nifty has another support at 3531. In addition to the 200 DMA support, the Nifty has deviated substantially on the downside from its short term moving average. The technical charts indicate a bounce back from the current levels. On the upside the first resistance for Nifty is at 3651 followed by 3726.

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Anand Rathi - Daily Strategist

The NIFTY futures saw a marginal fall in OI 0.13% with prices closing at 3548.75 indicating that lot of longs liquidated their positions and fresh short positions were built up in the market as the market was not ready to sustain at higher levels. Global factors also induced weakness in the market. We may not see aggressive short covering and fresh money coming in the market till the market doesn't sustain above 3750 levels .The nifty futures closed at a substantial discount of 28 points to spot nifty suggesting that futures market is oversold as compared to cash market. Selling pressure was witnessed even when markets recovered. The FIIs were sold nifty futures to the tune of 87.54crs .The PCR has come down from 0.99 to 0.93 levels again indicating weakness in the market .The volatility has risen from 27.70 to 34.95 levels indicating volatile trading sessions ahead and increase in premiums of call and put.

Among the Big guns, ONGC saw fall of OI to the tune of 2.90% with prices coming down 3.24% indicating lot of long positions are liquidated in the counter performing in line with the market whereas RELIANCE saw rise of OI to the tune of 6.74 % with prices coming down 4.32 % indicating that the counter is seeing lot of fresh short positions built up indicating further weakness in the counter.

On the TECH front, TCS, INFOSYSTCH, SATYAMCOMP, WIPRO saw fall of OI with sharp fall in prices indicating that lot of long positions are liquidated in these counters.

The BANKING counter lead by ICICIBANK & HDFCBANK saw OI coming down marginally and prices going down indicating longs liquidating their positions and fresh short positions formed in these counters whereas SBIN saw heavy fall in OI to the tune of 10.56 % with fall in prices to the tune of 4.22 % indicating liquidation of long positions in the counter.

In the METALS TATASTEEL, HINDALCO, STER, NALCO saw liquidation of positions whereas SAIL, JSWESTEEL saw fresh short positions built up in these counters indicating further weakness in these counters.

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Considering the overall scenario and the markets fell down sharply mainly due to global cues any recovery in foreign markets may lead to sharp short covering in our market ., we feel one should hedge the positions. Traders are advised to place strict stop losses.

From the Research Desk

Ahmedabad Visit Note

Cadila Healthcare Limited.

Recommendation Maintain BUY
CMP Rs316
Target Price Rs417

We expect CHL to record revenue CAGR of 20% to Rs24.9bn over FY06-09 driven by strong growth in the export formulations market. Domestic formulations growth is likely to rebound in FY08 and would be above industry average growth. We estimate operating margins to expand by 450bps to 21.7% over FY06-09 driven by US contribution, turnaround of Zydus France and strong foothold in the domestic formulations space. Although there are concerns over the patent loss of Pantoprazole, the management is confident of no launch at risk by generic companies considering the complexity of the product. We estimate net profit to witness revenue CAGR of 32% to Rs3.5bn during the same period. At Rs316, the stock is trading at 17.7x FY07E EPS of Rs17.8, 14.3x FY08E EPS of Rs22.1 and 11.4x FY09E
EPS of Rs27.8. We believe CHL should trade at 19x FY08E and 15x FY09E considering increasing visibility in export formulations, strong foothold in the domestic market and return ratios in excess of 22%. We introduce FY09 estimates and maintain BUY with a target price of Rs417, an upside of 32%.

STRATEGY INPUTS FOR THE DAY

Yen-abling a bear arrest!

For fast acting relief, try slowing down.

After a 16% fall from the top in the Sensex, the bulls can hope for some relief today. A positive trend across Asian markets could well pave the way for a higher opening. Most stock benchmarks in Asia are up between 0.5-1.5% following Monday's mayhem. The reason one may ask. Yen, the much dreaded Japanese currency, has broken the sequence of three consecutive days of advance against the dollar and the euro.

Another relief could come from Friday's FII figures. Foreign funds, which have been a major driving force behind the four-year rally, actually pumped in Rs3.25bn ($73.3mn) on a day when the Sensex lost 273 points. Mutual Funds on the other hand were net sellers to the tune of Rs2.09bn on the same day.

Monday's provisional data from the NSE shows net selling of Rs7.32bn by FIIs. However, one has to wait for the final figure from market regulator SEBI before jumping to conclusions. In the F&O space, they were net buyers of Rs850mn.

We expect a technical (or should we say sentimental) rebound at the start of trading. F&O indicators point to an oversold situation with the Nifty March futures trading at a significant discount. Having said that, just like one swallow doesn't make a summer, one should not get carried away as there could be fresh selling post a rebound. So, take every bounce with a pinch of salt. Short-term traders are likely to be the worst hit, while for those who idolise people like Warren Buffet this is the ideal time to cherry pick one's favorite stocks.

Things are going to be pretty volatile this month. Unless there is renewed buying from the bulls at lower levels, this market will continue to be choppy with mostly negative bias. Also, inflation and interest rates have to stabilise. Globally, the liquidity factor has to improve considerably. Valuations are still quite high despite the correction. Global risk appetite seems to be on the wane and the risk-reward ratio has swung in favour of the former. Caution is the key word as making money won't be a cake walk this year.

US stocks slumped for a third day running as investors continued to exit equities amid worldwide weakness. Worries about the fallout from the sub-prime mortgage lending business and fears of defaults in the housing market also added fuel to the fire.

The global selloff in equities pushed yields on US Treasuries to levels reflecting expectations the Federal Reserve will cut interest rates this year. The S&P 500 and Dow Jones touched their eighth decline in nine days.

The S&P 500 lost 13.05 points, or 0.9%, to 1374.12. All 10 of its industry groups retreated. The Dow slipped 63.69 points, or 0.5%, to 12,050.41. The Nasdaq fell 27.32 points, or 1.2%, to 2340.68. All three benchmarks closed at their lowest since November.

In currency trading, the dollar fell to a three-month low versus the yen. The dollar rose, however, versus the euro after the European currency also slumped versus the yen.

Treasury prices were little changed, with the yield on the 10-year note at 4.5%, little changed from Friday. COMEX gold for April delivery fell $4.90 to settle at $639.20 an ounce.

US light crude oil for April delivery fell $1.57 to $60.07 a barrel after the slide in global markets spread to commodities. The front-month contract was trading nearly flat in extended trading in Asia.

Russian stocks fell sharply, weighed down by declines in commodities and Asian stocks. The RTS index recouped some of its early losses, but ended down 3.2%. It is now down 9.6% on the year, making it the worst-performer year-to-date among major global benchmarks together with India. In Mumbai, the benchmark BSE Sensex closed down 3.7%, for a 10% decline on the year.

Latin American stocks fell as investors continued to move money out of emerging markets. In Sao Paulo, the Bovespa index fell 2.8%, to finish at 41,179.16 and Mexico's IPC benchmark index of the 35 most traded shares fell 2% to 25,788.37. The Bovespa in Brazil is now 7.4% on the year, and the IPC is down 2.5%.

European stocks dropped for the fifth session in a row with investors worried about a host of concerns including mortgage lending in the US, the strength of the Japanese yen and Chinese stock valuations.

The German DAX Xetra 30 dropped 1% to 6,534.57, the French CAC 40 fell 0.7% to 5,385.03 and the UK's FTSE 100 lost 0.9% to 6,058.70.

Market Watch & Insider Trades

Insider Trades:

Pyramid Saimira Theatre Limited: Swiss Finance Corporation (Mauritius) Ltd has purchased from open market 775000 equity shares of Pyramid Saimira Theatre Limited on 2nd March, 2007

Gujarat Ambuja Cement Ltd: Shri P B Kulkarni, Director has sold in open market 20000 equity shares of Gujarat Ambuja Cement Ltd on 27th February, 2007.

Market Volumes:
The turnover on NSE was down by 4.5% to Rs85.51bn. BSE Capital Good index was the major loser and lost 5.51%. BSE Auto index (down 5.18%), BSE Consumer Durable index (down 4.68%), BSE Pharma index (down 4.64%) and BSE Metal index (down 4.59%) were among the other major losers.

Volume Toppers:
IFCI, SAIL, Gujarat Ambuja, R Com, NTPC, ITC, TTML, Reliance Industries, Tata Steel, India Cement, Ashok Leyland, Hindalco, MTNL, Indiabulls, Firstsource, HLL, Nagarjuna Construction, HCC and Praj Industries.

Lower Circuit Filters:
Amara Raja, Ansal Infrastructure, Crisil, Gujarat Flurochemicals, KSB Pumps, Shaw Wallace, Mangalam Cement, Autoline Industries, Fedders Llyod, Nirlon, GMR Industries, Gulf Oil, Kesoram Industries, Shree Precoated, Swan Mills, Texmaco, Tulip IT and Unitech.

Brokers Recommendation:
Era Construction – Buy from Kotak with target of Rs500

Long Term investment:
Sun Pharma

Major News Headlines:

Wipro, Oracle in pact to support IPTV providers

Hindalco Board to mull interim dividend on 12th March

L&T board to consider interim dividend on 13th March

KLG Systel Board to consider interim dividend on 12th March

Century Textiles Board to consider interim dividend on 14th March

TV 18 to give Rs2 a share as mid-year dividend

Sterlite Optical receives UL certification for structured data cables

M&M Board approves bidding for 43% stake of Punjab Tractors

SAIL April-Feb output at 11.4mn tons VS 10.9mn

Moser Baer to invest $250mn on solar cell plant

HOW MARKET FARED

Will the bear onslaught continue?

Bears continued their reign as domestic markets continue to get infected by global cues. Bulls were down & out as the benchmark index fell over 450 points and NSE Nifty declined over 150 points led by heavy selling in heavy weights like L&T, RIL, Infosys and Tata Steel. The BSE Mid-Cap and the small cap indexes also participated in the downfall dragging the benchmark Sensex to hit a low of 12344.44. Finally, the 30-share benchmark Sensex slumped 417 points to close at 12415. NSE Nifty fell 150 points to close at 3576.

L&T declined by over 5% to Rs1383. The board of Directors of the company has announced that they would consider interim dividend on 13th March. The scrip touched an intra-day high of Rs1462 and a low of Rs1375 and has recorded volumes of over 12,00,000 shares on NSE.

JSW Steel was down over 8.5% to Rs430. The company posted a 30% growth in crude steel production. The scrip touched an intra-day high of Rs468 and a low of Rs422 and recorded volumes of over 13,00,000 shares on NSE.

Technology stocks also have been among the major losers. Mid-Cap stocks were among the major losers, Rolta dipped over 13% to Rs283; Polaris was down 9% to Rs157 and NIIT Ltd dropped over 7.5% to Rs693. Wipro, Infosys and Satyam Computer were the major losers among the heavy weights.

Power stocks were on the receiving end. Suzlon declined over 6% to Rs985, Tata Power was down nearly by 4% to Rs508 and REL slipped 1.2% to Rs469.

Aviation stocks also crashed down on back of selling pressure. Jet Airways plunged by over 9.5% to Rs542, Air Deccan slumped over 9% to Rs106 and Spice Jet declined 2.2% to Rs45.

Telecom stocks were also battered out. Reliance Communication declined over 3.5% to Rs398, Bharti Airtel slipped 2.8% to Rs686, VSNL was down 1.3% to Rs355 and MTNL edged lower 0.8% to Rs134.

Select Cement stocks witnessed fresh buying towards the end. Gujarat Ambuja Cement gained 2% to Rs112; Grasim edged higher 0.3% to Rs2101. However, India Cement declined 6.2% to Rs158 and Mangalam Cement was locked at 55 lower circuit to Rs159.

Edelweisss - PCG DAILY MARKET CALL 06-March-2007

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Anand Rathi - Daily Technical Note

Nifty and Sensex have exhibited bearish candlesticks.

Technically, one may use the level of 3450 (Nifty) and 12000 (Sensex) as the stop loss level.

Nifty faces resistance at 3750 and Sensex at 12800.

BSE Smallcap and BSE Midcap Indices have exhibited a bearish candlestick.

CNX IT has exhibited a bearish candlestick.

In the Punter's zone we have a sell in Tata Steel & buy in Hind Lever , Grasim.

In the technical zone we have a buy in Hcl-Tech , Bhel & Infosys Tech.

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Weakness to continue

The Sensex corrected more than 2000 points from its all time high and is expected to dip further on concerns of slowdown in US economy. Also the weakness in global equity markets on sliding Chinese equities, unwinding of yen carry trade may put pressure on the domestic market. However, firm Asian indices in morning trades and FII turning net buyers on Friday when market had a sharp fall, may add to market advantage and help the sentiment to turn positive. Among the domestic indices, the Nifty could test higher levels of 3670 and may dip to 3480 on the downside. The Sensex has a likely support at 12344 and may face resistance at 12440.

US indices witnessed choppy trading during intra-day trades and ended on a weak note on Monday amid weakness in global markets and worries about the fallout from the subprime mortgage lending business. While the Dow Jones was down by 64 points at 12050, the Nasdaq ended 13 points lower at 2341.

Indian floats ended largely with losses on the US bourses. Patni computer was the major loser and fell over 6% and HDFC Bank was down around 5% while, Infosys, Satyam, Wipro, Dr Reddy's, Tata Motors, Rediff and VSNL lost over 1-3% each. However, ICICI Bank was up over 1% and MTNL remained unchanged.

While the Nymex light crude oil for April delivery moved down by $1.57 cents at $60.07 a barrel. In the commodity space, the Comex gold for April series tumbled by $4.90 to settle at $639.20 a troy ounce.