Market Close : Relief? On value buying

It was volatile day for Indian markets and managed to end in green after value buying seen in some counters. Markets started on a subdued note following the mix global cues. US worries continued to prevail as Fed Chairman Ben Bernanke words which forecasted more home foreclosures to continue. Markets traded range in the same trend on lack of buying activities. Markets saw very volatile, trading to and fro on either sides. But some value buying at lower level lifted the indices to end in green. Only the large caps gained, small and mid caps were under pressure. IT sector was the pick of the day, gaining around 4% Metals and Oil & gas also gained over 1%. Power, Realty and Banking stocks were under check. The cues from Asia are not very encouraging with most of the Asia ended lower, while European indices are trading firm in green.

Sensex closed up by 202 points at 16542.08. It was helped up by gains in Satyam (433.8,+7 percent), ITC (194.25,+5 percent), HDFC (2755.25,+4 percent), Hindalco (208.1,+4 percent) and Dr Reddys (579.9,+4 percent). Restricting the gains were Bajaj Auto (2128.05,-3 percent), Rel Energy (1459.45,-3 percent), Bharti Tele (750.2,-2 percent), HDFC Bk (1336.4,-2 percent) and HLL (225.55,-2 percent).

Reliance Energy Ltd (REL) has approved a buy-back of its outstanding equity shares for an aggregate amount of up to approximately Rs 2,000 crore in two phases. An amount of Rs 800 crore will be expended in the first phase on the share buyback. A further amount of Rs 1,200 crore will be expended in the second phase. REL will buy-back shares up to a maximum price of Rs 1,600. The buy-back news were around the corner for sometime but it failed to sustain REL?s price on the bourses. REL closed 3% down.

McLeod Russel India Ltd (McLeod) is largest tea plantation company in the world. Mcleod , has around 52 tea estates with total capacity of 70mn kg. Tea production is expected to be stagnant with limited land availability. This has led to good realisation and it is expected to futher go up. For short term Kenya's drought problem and political issues has affected production there. McLeod Russel sees a rise of Rs 5-7 for the rest of the year in tea prices.This has led to a recent run in tea stocks. We are positive on Mcleod. Do read our note to know more.

Technically Speaking: Markets ended on volatile manner with negative breadth and low volume. Sensex made an intra day high of 16596 and low of 16253. The breadth was in favor of Declines, as there were 783 Advances against 1920 Declines. Market turnover was at Rs 5348 cr. Sensex support stands at 16200 and 15800. Resistance lies at 17000 and 17250.