Immense volatility on the bourses pushes the Sensex in the Red:

Mid Caps Close at 4922.85: Small Caps Close at 6612.72 down 22.08 points: Keep buying good small and mid cap counters: Crude inches higher to $63.94 per barrel, up 48 cents:

Vamshi Rubber Industries Ltd Recommended , yesterday morning Hits the 20% Buyer Freeze & Relaxo Footwear recommended some days back hits the 20% Buyer Freeze; while Agro Dutch Industries Ltd refused to go down below Rs.22.5:

The market settled in the red after witnessing high volatility throughout the yesterday's trading session, moving between positive and negative zone. However, metal stocks were in demand led by Tata Steel. The Sensex settled 41.80 points lower at 13,340.21. It swung sharp 335 points for the day from an intra-day low of 13232.56 and intra-day high of 13568.09. The S&P CNX Nifty lost 16.45 points to 3815.55 The total turnover on BSE amounted to Rs 3672 crore which was lower than Tuesday's Rs 4183 crore The market breadth was negative on BSE, as selling emerged for small-cap and mid-cap stocks. On BSE with 1465 shares declined as compared to 1094 that advanced. 83 remained unchanged. The BSE Mid-Cap index was down 0.38% or 21.38 points at 5574.40 while the BSE Small-Cap index lost 0.21% or 13.94 points to 6,620.86. Among the Sensex pack, 21 advanced while the rest declined. Tata Steel was the top gainer, up 2.30% to Rs 465 on 15.75 lakh shares. It recovered from low of Rs 450.10. The stock advanced after Britain's takeover watchdog set a 30 January deadline on Tuesday for Tata Steel and Brazil's CSN to make revised offers for Anglo-Dutch steelmaker Corus Group. Cipla (up 1.24% to Rs 244), Maruti Udyog (up 1.73% to Rs 925) and HDFC (up 1.97% to Rs 1580) edged higher. Diversified conglomerate, ITC rose 1.13% to Rs 170.25 on 15.09 lakh shares after reports that it will expand its fruit and vegetable retail and wholesale business by opening 54 new outlets in select metros in next three years. The company would target metropolitan cities for these wholesale-cum-retail stores. Currently, there are 6,500 e-Choupal kiosks in over 38,000 villages in nine states. PSU engineering company Bhel settled 0.46% lower at Rs 2276.10 on volume of 3.28 lakh shares after touching a low of Rs 2232. It had lost close to 10% in the past two trading sessions. Tata Motors was the top loser, down 3.22% to Rs 835.10 on 5.46 lakh shares. It had hit a high of Rs 880.40 in early trade HLL (down 3.14% to Rs 217.70), Grasim (down 2.29% to Rs 2655) and HDFC Bank (down 1.82% to Rs 1019) edged lower. Index heavyweight Reliance Industries (RIL) finished 0.24% lower at Rs 1250.10 on high volumes of 13.29 lakh shares. It had recovered from low of Rs 1231.15. Sobha Developers settled at premium at Rs 968.75 on BSE, compared to its IPO price of Rs 640 per share. The scrip debuted at Rs 1111.25 on BSE and hit a high of Rs 1179. Its low was Rs 918.10. The counter saw high volume of 73.38 lakh shares on BSE. Sobha Developers' IPO was subscribed over 100 times. Ruchira Papers finished at discount at Rs 20.95 on BSE, compared to IPO price of Rs 23 per share. The stock listed on BSE at 5.86% premium at Rs 24.35 per share, which was also its intra-day high. It touched a low of Rs 20.65. The counter saw volumes of 41.17 lakh shares on BSE. The BSE Metal index gained 0.45% or 38.76 points at 8644.17 as buying resumed for metal shares. JSW Steel (up 5.41% to Rs 350), NALCO (up 0.43% to Rs 211), Hindustan Zinc (up 0.51% to Rs 835), Jindal Stainless (up 0.31% to Rs 112.50) and Jindal Steel & Power (up 1.03% to Rs 2180) advanced. Telecom software provider Tech Mahindra jumped 7.18% to Rs 1238.10 on renewed buying in anticipation of strong financial performance for Q3 December 2006. The scrip hit a high of Rs 1285, which is a lifetime high for the counter. Also there are reports that the company has bid for UK operations of Tiscali with the bid amount pegged at over 600 million pounds. Tiscali has 1.4 mln broadband users in UK. iGate Global Solutions surged 16.66% to Rs 305 after the company announced board meeting on 10 January 2007, to take on record Q3 December 2006 results. A block deal of 20 lakh shares was struck on Reliance Petroleum at Rs 63.25 per share. The stock was down 0.16% to Rs 63 on total volumes of 22.66 lakh shares. MRF rose 0.91% to Rs 4325 after surging to an intra-day high of Rs 4495. It reported net sales of Rs 4248.3 crore for the year ended September 2006 as compared to Rs 2966.20 crore last year. Net profit jumped to Rs 79.90 crore (Rs 40.30 crore). Mid-sized software firm Four Soft jumped 4.33% to Rs 71.10 after the company's board approved the acquisition of Denmark's Transaxiom Holdings A/S for $10 million in a cash and stock deal. The Danish company, which provides software services for transportation and logistics services providers, would help expand Four Soft's presence in Scandinavia, Australia and Hong Kong, Four Soft said. The integration of the acquired company would begin next month. Transaxiom's annualised revenues of its current operations would be around $8 million. Peninsula Land plunged 7.91% to Rs 629 after the company priced placement of shares with qualified institutional buyers at Rs 600 a share, a discount of 12% to Tuesday's closing price of Rs 683.05. Indiabulls Financial Services rose 0.57% to Rs 541.10 after it acquired 100% shareholding in Noble Realtors. Noble Realtors is engaged in the business of construction and development of real estate projects. Essar Oil rose 1.85% to Rs 46.70 after the refiner said it had begun exporting oil products from its refinery in Gujarat. Pioneer Embroideries surged 5% to Rs 229.35 after the company said it would invest Rs 100 crore over the next three years to widen its retail presence in the country. Around 30% of these stores would be company owned and the balance through franchisees. Gitanjali Gems advanced 2.50% to Rs 219.30 after the company announced on Tuesday that it has acquired a majority ownership interest in Samuels Jewelers Inc. from funds managed by DDJ Capital Management. Samuels operates 97 retail jewelry stores in 18 states throughout the United States. Volatility is expected to remain high in the next few days ahead of expiry of December 2006 derivatives contracts next Thursday (28 January). The near term trigger for domestic bourses is Q3 December 2006 results. Market men expect December 2006 quarter to be another strong quarter in terms of earnings growth. The Q3 results would start trickling in from about 12 January 2007. Asian shares rallied from the biggest drop in a month after Thailand scrapped day-old penalties on stock investments. Toyota Motor Corp. and NEC Corp. gained after the yen fell, boosting the value of Japanese exports. Japan's Nikkei 225 Stock Average gained 1.4% to its highest since 9 May. Markets rose across the region, except in the Philippines and India. Benchmarks in New Zealand and Australia climbed to records. PTT Pcl and Advanced Info Service Pcl led Thailand's SET Index to an 11% gain, rebounding from a 15% slump on 19th December, its worst in 16 years. It spurred recoveries in emerging-market stocks after the Thai government abandoned rules imposed on 18 December to lock up 30% of foreign-currency deposits for a year on funds earmarked for equities. PTT, Thailand's biggest energy company, jumped 15% to 214 baht after plummeting 17 percent yesterday. Advanced Info, its largest mobile-phone operator, jumped 14% to 76 baht, recovering from a 21 percent drop. The Nikkei share average topped 17,000 for the first time in seven months on Wednesday as shares of Toyota Motor Corp. and other exporters gained after the yen fell to a record low against the euro and neared a one-month low against the dollar. The Nikkei 225 index was up 1.40% at 17,011.04, breaking above 17,000 for the first time since 11 May. Hang Seng index was up 1.45% to 19,240.12 European markets also opened positive, with Spain's Madrid General being exception. The FTSE 100 index gained 0.44%. FIIs were net sellers in three out of four trading sessions from 13 December to 18 December and that weighed on market sentiment. Their net outflow was Rs 182.70 crore on 18 December. As per provisional data, FIIs were net sellers to the tune of Rs 823 crore on Tuesday (19 December). They were also net sellers to the tune of Rs 831 crore in index-based futures on that day. Oil continued to trade above $63 a barrel Wednesday with slight fluctuations as traders awaited a weekly report that was expected to show a drop in U.S. oil inventories. Light sweet crude for February delivery was down 15 cents at $63.31 a barrel in electronic trading on the New York Mercantile Exchange. At London's ICE Futures exchange, oil prices also moved slightly lower, with Brent crude for February delivery down 17 cents to $62.64 a barrel. [From Internet]

My Addition:

Yesterday Vamshi Rubber hit the 20% buyer freeze. There are interesting developments taking place in the company. The company has 4 acres of land in Hyderabad. One Hyderabad Based Equity Advisory firm is Super Bullish on the counter and has placed a target of Rs.70--Rs.75 due to some recent developments. The company came up with an excellent results in the last quarter(Q2FY--06-07), due to the RUBBER PRICES........and informed investors does have to be reminded how the rubber prices are moving in the domestic and international markets. The company will also benefit from the fall in the Metal Prices. Besides this there is another interesting development taking place in the company which I will be able to disclose only on next Monday.

Nova Petroelum Ltd hit the 7th consecutive buyer freeze. At present, Nova is ranked 3th in synthetic yarn production, with installed capacity rising from 120 to more than 200 tonne per day. It is set to get the fruits of Rs.125 Cr expansion plan it undertook a couple of years back. Also it is carrying out expansion of it's poly condensation plant and power plant. The company is thinking of financing the expansion plans by means of FCCB / GDR / IPO route. The grapevine is that it is coming up with an IPO soon. The company came up with a bonus issue of 1:1 in the last fiscal. On the NSE it closed a tad higher at Rs.21.40. It is expected to hit some more circuits as the December, 2006 quarter results are set to be good. Also there are rumours of some private placement of shares at a much higher rate than the market price. The company is set to get the benefits from the fall in raw material prices. MORE NEWS ARE EXPECTED ON THIS COUNTER.

Relaxo Footwear Ltd hit the 20% upper circuits today, on the prospects of better results in the coming quarters. The stock was recommended at Rs.35.

Agro Dutch Industries Ltd which was recommended at around Rs.23, closed flat after rising to Rs.23.25. It is one of the finest Mushoom maker in India with 100% EOU. The company will benefit from the fall in Indian rupee and also due to Indian Mushrooms getting priority in the US and Mexican markets. The promoters are increasing the stake in the company. The company will turn out to be one of the Largest Can Maker by the end of this fiscal. Compare the price of the shares of this company with that of another Can maker SHETRON LTD (for packaging) which is trading at Rs.71 and Agro Dutch is both---a Mushroom Producer and a can maker(for its own use). Agro Dutch will also benefit from the fall in metal prices.....IT is surely a multi-bagger and a hidden gem. It is to be noted that 80% of all the mushrooms produced in India comes from this company. The September, 2006 quarter results are excellent. The scrip is trading at almost half the book value price. Another mushroom producer Premier Explosives Ltd was hitting buyer freezes only some weeks back.

Accumulate Conart Engineers Ltd at around Rs.23-Rs.24 on any bad day. Accumulate Gravity(I) Ltd at around Rs.6.5--Rs.7 on any bad day. Accumulate Coral (I) Finance & Housing Ltd at around Rs.21--Rs.22 on any bad day--the stock was asked to accumulate for the second time at the same price( mentioned earlier) which has already given 40% return in just 2 weeks.

Please do not sell Chandra Prabhu International Ltd in a hurry as the shares of the company could start hitting the Upper Cicuits from the next month or early February, 2007. The company is on the verge of signing another deal with a mineral exporting major(Whose name I cannot disclose now due to some constraints) for its drilling and exploration venture. Its Jatropha cultivation will start to bear fruits from the end of 2007. It is also into bio-tech (Medicinal Plants) sphere. Please visit: www.cpil.com for more on the company.. It is a major player in the Coal Sector. It supplies coal to plants in the North India, from Bihar, Jharkhand, Madhya Pradesh etc. The company is expected to start coal drilling and exploration from the next year. Another Coal India Ltd in the making ???!!!!! Keep Guessing.......Hence it is a multibagger in the making....

Texmaco at Rs1,094.35 hit the upper circuits, yesterday on sustained buying. In the early 2004 when the stock was at Rs.98 and I had mentioned a target of Rs.1000 in 2 to 3 years, many did not believe me; but now the results are in front of all. This is the fruit of long term investment.

Also my recommended pick Sonata Software at Rs67.50 hit the lower circuit on the BSE after rising non-stop for some days. This stock was recommended in this blog at around Rs.29 a couple of months back.

Tomorrow, the markets will remain flat ahead of the holiday season. But buying will continue in the small and mid-cap space, which is the most undervalued space these days.

Tomorrow I might recommend another stock, keep some cash for some good gains in the short to medium term.

No time today......more in the following postings.

Best wishes,

Suman Mukherjee

India.

www.eindiabrokers.com