Market Close : Small (Cap) Is Profitable!

After a modest start markets refinemained healthy and ended on a strong note. Once again the Small caps and Mid caps proved to be the winners outsmarting the Large caps. In the last hour of trade momentum was seen in some large stocks like GAIL, ONGC and HPCL. Steel and energy stocks were the flavour of the day. Markets seemed to be in active mode and every stock with concept story was on the run. Sectorial wise Banking, Oil & Gas ,PSU?s and Realty were among the major gainers. Software stocks were out of favour due to depreciating dollar. The Organisation of Petroleum Exporting Countries (OPEC) was expected to hold the cartel's official output quota at 27.25 mn barrels of oil per day amid forecasts that demand would fall because of current global economic weakness. Hence OPEC decided to keep output unchanged at 27.25 mbpd. Cues from global peers were encouraging with most of the Asia ended in green and European markets trading higher.

 

Sensex ended up by 209 points at 19738.07.It was helped up by gains in ONGC (1206.3,+4 percent), Tata Motors (771.75,+4 percent), SBI (2383.55,+3 percent), Hindalco (199.2,+3 percent) and Cipla (189.35,+2 percent). Restricting the gains were TISCO (865.35,-1 percent), Infosys (1603.25,-1 percent), Hero Honda (695.3,-1 percent), Satyam (438.75,0 percent) and Grasim (3796.1499,0 percent).

 

Karuturi Networks was on circuit today after our recomendation. Karuturi is the largest rose player in the world. It has 2 segments of business, Horticulture and ISP. More than 90% of the revenue comes from the flower business. Karuturi has a total capacity of 650 mn stems. It has 10 hectares in India with 10 mn stems capability inhouse and another 25 mn stems which are managed through contract farming. 100 hectares are operational in Ethiopia with a capacity of over 100 mn stems. Karuturi Networks has been allotted additional 450 hectares of land by the Government of Ethiopia for its expansion and diversification projects. The Kenyan acquisition of Sher brought in abnout 525 mn stems. Globally 40,000 hectares of land is under rose cultivation. However, The field sizes globally are fragmented and are not over 200 acres. Karuturi is one of the big players here now. We have detailed research note. Do read our view to know more about the story.

 

Lok Housing was on fire and shot up to cross our estimated target. Lok Housing & Constructions (LHCL) a company of Lok group mainly in the suburbs of Mumbai. Lok Surabhi , Lok Kedar , Lok Everest, Lok Malhar and Lok Nisarg at Mulund, Lok Yamuna at Marol , Lok Amber at Ambernath, Lok Prabhat at Virar are some of the projects executed by the company. It is planning to commence premium projects in Mumbai and at other places like Pune, Vasai, Bangalore,Turbhe.Till date Lok Housing has completed 31 projects over 17,000 units and 9mn sq.ft area. Lok housing has a good amount of land bank and some valuable salt pans plots are still under litigation. We believe that this event is the big trigger if at all for Lok Housing. Chances are that the owners may manage it in their favour given the history of such cases between the Government and Corporates. Keep watching this space for more updates.

 

Technically Speaking: Sensex traded in green and witnessed an intra day high of 19,791 and low of 19,561. Advaces outnumbered Declines in the ratio of 3 :1. Volume of Rs 9,340 Crs was churned through out the day. Sensex has closed above the resistance of 19700. The immediate resistance now are at 19990 and 20150. Support for sensex is at 19540 and 19390.