Market Close : Jolt ahead of Fed meet

Although US markets ended in green with the bet that another rate cut is on cards?Indian indices had a disappointing day which opened weak on inconclusive note. Markets continued with selling pressure through the day and finally ended with a deep cut. Tomorrow being the FnO expiry day, the markets were clearly in a cautions mood. Volumes have dried up and markets were more news driven rather than fundamentals. With the US recession fear on mind, companies with good results are also sidelined. Near term the focus will shift to the Budget and rate cut issues. Small and mid caps counter continued to be fragile. Oil & gas and Power were among major losers. Asian indices ended in red, while Europe trading cautiously weak.

Sensex closed down by 333 points at 17758.64. Weighing on the Sensex were losses in Rel Energy (1992.3,-5 percent), HLL (196.6,-5 percent), ONGC (968.5,-5 percent), RCVL (612.35,-5 percent) and NTPC (201.7,-5 percent). Losses were restricted by gains in BHEL (2089.25,+2 percent), HDFC (2894.05,+2 percent), TISCO (723.5,+1 percent), Guj Ambuja (118.3,+1 percent) and ACC (797.35,+1 percent).

The third quarter review of the Annual Monetary Policy for the Year 2007-08 brought in a surprise. RBI left key policy rates unchanged as against a cut which was widely anticipated. There is slower growth witnessed in certain sectors, but by and large the domestic economic fundamentals remain intact believes the RBI The RBI had a hawkish stance on the back of excessive credit growth, overheating of economy and inflation worries. The stance is neutral now. There has been high levels of liquidity with strong FII flows and the excess liquidity was soaked up with high CRRs. We have more insight on this topic in Heard & read section. Do have a look on that.

Avaya came out with disappointing Q1 Dec 2007 numbers. Topline was flat at Rs156 Cr on y-o-y basis. EBIDTA was down by 11% to Rs 12.9 Cr. PAT dropped by 18% to 6.9 Cr. NPM was 100 basis down to 4%. The company has changed its year-end from March to September this year. Since the value is for a period of 18 months. Hence the figures for full year are not comparable. Australian subsidiary of Avaya Global Connect has not contributed to the bottom line although the topline is significant and this surprises us. The company?s management lacks transparency and this hurts a bit to understand more. Seems as the earnings would continue to be in the range of 20-25 for the coming quarters. Valuations are Ok at this price. Keep watching this space and we will update more on this.