Market Close: Profit booking as all eyes on Fed..

It was a firm start but market struggled to keep itself up in green as profit booking across the sectors. Indices lost its ground in the mid session as Europe opened in red which added to the fall. Market recovered a bit from its lower level in later session but selling pressure continued as cautious investors preferred to book profits ahead of Fed meet which is scheduled tomorrow. Markets slumped into the negative territory to end at days low. FMCG inex ended in green while rest witnessed selling pressure. IT stocks continued to lag behind on account of strong Rupee against US dollar.

 

Northern Rock as Mortgage Lender which is the latest Victim of Global credit worries slumped as it Dragged FTSE 100 which fell by 2% due to this European Markets opened in red. This could create a jitter world across.

 

Sensex ended down by 99 points at 15504.43. Weighing on the Sensex losses were in TCS (997.35,-2 percent), RCVL (530.8,-2 percent), Bharti Tele (814.25,-2 percent), Satyam (422.2,-2 percent) and NTPC (182.75,-2 percent). Losses were restricted by gains in Rel Energy (907.8,+3 percent), Maruti (874.45,+1 percent), Bajaj Auto (2393.8501,+1 percent), Guj Ambuja (145.2,+1 percent) and Tata Motors (696.3,+0 percent).

 

Subex Azure went for profit booking after the company reported that it has lowered FY-08 net profit guidance by 33 % to Rs 104 crore on cut in technology spending by North American client. The company has also cut FY-08 product revenue guidance to Rs 520 crore from Rs 615 crore. Guidance was lowered due to postponement of commitment by a US customer. The forecast was slashed from the earlier $150 million and $38 million, respectively following capital expenditure reduction by AT&T and consequent delays in projects. The sub-prime impact seems to be rubbing off on others also. Companies catering to the telecom space are where one needs to be doubly cautious. These include Wipro, Sasken, HCL Tech, KPIT; Sterlite Optical may be Tech Mahindra to some extent where we are aware of Telecom customers. The rupee continues to be strong? but it?s the derating process of the IT sector which is happening on the business visibility. The stock ended down by 12% on the back of news.

 

Government today exempted four services including transport and port services used by exporters from service tax. Government has issued a notification providing refund of service tax paid by exporters on four taxable services which are not in the nature of input services but could be linked to export goods. The government collects 12 % service tax along with 3 % education cess on services. Exporters already get refund of service tax paid by them on input services used for exports. Drawback scheme also factors service tax paid on input services used for exporting goods. In July the FM had provided a financial package of Rs 1,400 crore to exporters especially to the Textile, Handloom, Handicraft and other labour-intensive industries to cushion the impact of rupee appreciation. Stocks like Sical Logistics and GDL ended up on the back of news.

 

Technically speaking: Markets traded week on selling pressure as some negative cues inched from global markets. Sensex touched intraday high of 15726 and low of 15467. Overall market churned Rs 4673 Cr. Market breadth was in favor of Advances, where the Advances stood at 1509, while Declines were 1443. Near turn support seen at 15410 as it has broken 10 Day moving Avg if broken 15130 levels is on cards.