Market Close: No surprise even after Fed cut

It was clearly a volatile trade for Indian markets, which did not mirror the positive news from the Fed?s rate cut; even there was no support from global cues. However Indian markets managed to open in green but immediately slipped into negative zone with mixed response from global front as Asian markets traded in red in early session, ended mixed. Some sort of value buying was seen in counters like Oil & Gas, IT, FMCG and Auto stocks which turned into positive trend. Indices made good sort of recovery from the days low?s but the glimpse did not hold for longer time and again slipped into red on account of heavy profit booking across counter and managed to end with modest losses. The volatility was too because of F&O expiry, where F&O rollover position ended weak, compared to last month. It was a sea saw session for entire day; indices plunged on both the sides. Small & Midcap counter was salient for the day. Power, Metal, Banking and Capital goods were the sectors hit badly. The European markets are trading with hefty losses.

Sensex ended down by 110 points at 17648.711. Weighing on the Sensex were losses in Hindalco (165.75,-6 percent), ICICI Bk (1145.65,-3 percent), SBI (2162.25,-3 percent), ITC (195.2,-2 percent) and Dr Reddys (528.2,-2 percent). Losses were restricted by gains in HLL (206.5,+5 percent), Bajaj Auto (2355.6499,+4 percent), HDFC Bk (1568,+2 percent), ONGC (988.4,+2 percent) and Tata Motors (706.15,+1 percent).

Bajaj Auto Ltd., India's second biggest motorcycle maker reported its fiscal third quarter number where net profit fell 3% despite higher revenue as a sharp rise in input costs and slowing sales hit the profitability of India's second largest motorcycle company. Bajaj sales of motorcycles and three-wheeled auto rickshaws fell 3.3% in the last quarter as higher interest rates crimped demand in a nation where most vehicles are bought on credit. During the quarter net profit stood at Rs 274 cr as against Rs 328 cr in the quarter ended December 2006. Net Sales & Income rose marginally 2.83% to Rs 2696 cr for the quarter ended December 2007 from Rs 2633 cr for the same period last year. Key highlights for the quarter are the Export during nine months ended December 2007 increased by 41% to Rs 1500 cr and launches new 200cc Avenger DTS-I during the quarter. Do read our detailed note.

ACC came out with OK set of numbers for the full year 2007. Company reported 15% increase in full-year net profit benefiting from an all-time high sales volume and the cement sector's outlook which looks positive due to growth nationwide. ACC also added that it will invest Rs 14.5 bn to set up a new clinker line of capacity 7,000 tonnes per day at Chanda in the western Indian state of Maharashtra along with a captive power plant of 25 MW capacity. The project is scheduled for completion by 2010. Valuation seems to be expensive at the current market price in this quarter the cement prices had increased by Rs 5 per bag in southern region. One can enter at dips for a trading opportunity. Do read our analysis on this very soon.

Technically Speaking: Markets traded on weaker supportive breadth with lower volume. Volume for the day was at Rs 5152 cr. Sensex made an intraday high at 18,009 and days low at 17,418. Advance Declines ratio was in favors of Decliners as Advance stood at 989 and Decliners at 1760. Technically Sensex has failed to hold above last week's close of 18,361. We expect selling pressure whenever the markets go close to 18,300-18,400 levels. On the lower side there is a good support at 17,500. Below 17,500 we might see good fall up to 16700 and 16400.