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Weekly-market: Second straight week gain on strong earnings
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Saturday, July 17, 2010 |
| | | Market Commentary | | | Second straight week gain on strong earnings | | The domestic indices surge for the second consecutive week on strong results of Indian firms and sustained buying by FIIs | |
 Major news for the week:
- May index of industrial production at 11.5%
- Infosys Technologies falls on disappointing Q1 numbers
- Inflation rises to 10.55% in June
- Housing Development Finance Corporation?s Q1 net profit surges 23% yoy
- Tata Consultancy Services' Q1 net profit jumps 22% yoy
The Indian bourses rose to extend its winning run for the second straight week. The rally was led by good set of quarterly numbers from Indian companies, sustained buying by foreign funds and stock market regulator Securities & Exchange Board of India (SEBI)'s decision to allow physical settlement of stock derivatives.
The indices started the week on a constructive note as the Sensex hit 18000 levels, while the Nifty hit the 5400 levels. The IT bellwether Infosys Technologies flagged off the first quarter earnings season for top companies on July 13, 2010, but failed to beat market expectations. The start of the results season was not enthusiastic and made the investors cautious in taking positions. The indices faltered after India's index of industrial production (IIP) data for May came at 11.5% below forecast, inflation for June rose by 10.55% and for the week ended July 03, 2010 grew by 12.81%. The rising inflation concern, which might force Reserve Bank of India (RBI) to raise rates in its upcoming monetary policy on July 27, 2010 made the investors jittery. The lack of global support also restricted Indian bourses to rise. The results of Tata Consultancy Services (TCS) came in above market expectations, which lifted the markets sentiments on the last trading day of the week.
 During the week, the Sensex swung 311 points and the Nifty by 102 points. The Sensex and Nifty crossed the significant levels of 18000 and 5400 respectively at the start of the week. During the week, the Sensex and the Nifty hit the 30-month high levels of 18167 and 5453 respectively. However, the indices were unable to hold those levels and closed the week below their crucial levels. The Sensex signed off the week higher by 122 points or 0.69%, at 17956 and the Nifty shut at 5394, 41 points or 0.77% higher.
On the global front, after gaining heavily in the previous week, the global markets could not sustain their rally in this week. All the major global indices ended the week lower except domestic bourses along with FTSE-100 index that registered modest gains. On the other hand, Japan's Nikkei and China's Shanghai Composite index plunged the most with losses of 1.85% and 1.89% respectively.
 Realty, consumer durable (CD) and banking stocks did well for the week, with BSE Realty, BSE CD and BSE Bankex up by 6.04%, 3.91% and 3.03% respectively. The realty shares surged on speculation that the government will soon announce a hike in the foreign direct investment (FDI) in the real-estate sector. On the flip side, oil & gas and PSU stocks witnessed the selling pressure as the sector index BSE Oil & Gas and BSE PSU fell by 1.03% and 0.84% respectively. | | | Among 'A' group stocks; Educomp Solutions surged the most with gains of 15.81%, followed by Opto circuits that advanced by 10.83%. Jet Airways jumped 9.62% after the RBI asked 13 banks to frame a common policy for restructuring debt at airlines to provide relief to the ailing sector. Among the losers? chart, the oil firms occupied the top three slots. Hindustan Petroleum Corporation, Bharat Petroleum Corporation and Gail India declined by 8.31%, 7.13% and 6.34% respectively after the oil ministries' clarification on the subsidy sharing, which was against the oil marketing companies & upstream companies.
During the week, the foreign institutional investors (FIIs) invested heavily in the Indian markets. FIIs bought Rs6,593.10 crore shares in this week compared to Rs1,153.30 crore in the previous week. The domestic institutional investors continued to remain net sellers and sold shares worth Rs1,138 crore.
| | TOP MOVERS (GROUP A) |  | | | | | | | | | | Opto Circuits | 269.70 | 10.83 | | | | | | | | | | | | | | | |
| FII/MF ACTIVITIES | | | | | | | Gross purchase | 18,321 | 2,082 | | | | | Net investment | 6,593 | -1,138 | | | | | | | | | *As on July 15, 2010 | | | | In the coming week, the earnings of top India Incs like HDFC Bank, ITC, Wipro, Bajaj Auto, Punjab National Bank, Bharat Heavy Engineering and Maruti Suzuki may drive the Indian markets. The progress of monsoons may also provide some direction to the markets. The FIIs fund flows have always been crucial for the domestic bourses. The developments across the globe may also affect the Indian indices in coming week.
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posted by Anonymous @ 2:29 PM  |
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