WEEKLY MARKET OUTLOOK: 28TH JULY 2008
THE WEEK THAT WAS
Trading for the week started on an upbeat note. Markets galloped after the Congress-led coalition government won a confidence vote in parliament late on Tuesday, 22 July 2008, raising hopes for economic reforms. The 30-share BSE Sensex surged 838.08 points or 5.94% at 14,942.28 and the broader based S&P CNX Nifty advanced 236.70 points or 5.58% at 4476.80, on that day. However the market snapped its five-day rally and sink deep in red on the back of continued profit booking and weak global cues followed by the week sentiment of seven blasts that took place in Bangalore. Markets ignored stability in crude price and steady inflation numbers. The BSE bank, oil & gas, realty and capital goods stocks witness heavy selling pressure. Power, metal, auto and IT indices were also closed negative. More pressure was seen from domestic financial institution and life insurance companies.
Reliance Industries reported 13.2% growth in net profit to Rs 4110 crore on 40.65% increase in total income to Rs 41,805 crore in Q1 June 2008 over Q1 June 2007.
Reliance Communication galloped 15.60% to Rs 503.10 after it called off tie-up talks with South Africa's MTN Group, Africa's biggest mobile phone group, citing legal issues.
India’s largest listed cellular services provider by sales Bharti Airtel reported 44.86% growth in net profit to Rs 2046.79 crore on a 39.72% increase in revenue to Rs 7952.32 crore in Q1 June 2008 over Q1 June 2007.
Banking shares advanced in anticipation of reforms in the banking sector after the UPA government won trust vote in parliament. The Union cabinet approved the merger of unlisted State Bank of Saurashtra with its parent State Bank of India (SBI) on Thursday, 24 July 2008.
Ranbaxy Laboratories said a UK court had quashed the country's Serious Fraud Office's (SFO) prosecution of the firm's subsidiary. Ranbaxy said in a statement the English Crown Court had also declined an application by the SFO for permission to appeal to the English Court of Appeal.
Shares of firms which are potential beneficiaries of the Indo-US nuclear deal surged after the Indian government won parliamentary vote of confidence clearing the way for the landmark civilian nuclear deal with the US. They are- Reliance Infrastructure, Alstom Projects, Rolta India, Walchandnagar Industries, Areva T&D, Larsen & Toubro, NTPC all surged during the week.
Inflation based on the wholesale price index rose 11.89% in 12 months to 12 July 2008, below the previous week's annual rise of 11.91%, government data released on 24 July 2008 showed. Inflation for the week ended 17 May 2008 was revised upwards to 8.66% from 8.10%.
THE WEEK AHEAD
Volatility will rule the the bourses next week. The Reserve Bank of India (RBI)’s monetary policy review, futures & options expiry for July 2008 series, progress of monsoon, and results of key index pivotals will dictate the trend.
Soaring inflation which is hovering near 13-year high has been a key concern for the financial markets. The Reserve Bank of India (RBI) is set to review the monetary policy on 29 July 2008. RBI may further hike short-term interest rates or the repo rate as well as statutory deposit requirements or the cash reserve ratio (CRR).
The progress of the monsoon will also be watched very closely, as it will influence the GDP figures. Monsoon rains were 33% below average in third week of July 2008, according to Indian Meteorological Department. Scant rainfall is bad news for the government, which is battling runaway inflation, which has surged to a 13-year high, largely due to a sharp rise in commodity prices.
There are expectations that the government may push forward some economic reforms which had been stalled over the past four years due to opposition from Left parties, after it won trust vote in parliament on Tuesday, 22 July 2008. Left parities had stalled privatisation of state-run firms, pension reforms, higher foreign limits in insurance and more liberal norms for foreign bank.
A sharp cooling off crude oil which touched record high of $147 per barrel early this month augurs well for the Indian economy. It is currently hovering at about $126 a barrel. Any sharp rebound in oil prices would dampen the sentiment.
Market experts however feel that the market is still cautious and there is a lot of cash on the sidelines. He believes the markets have already tested their bottom last month however, he said that a full-scale bull market is unlikely.
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Monday, July 28, 2008
Saturday, July 19, 2008
Market Update: Week starting 21st July 2008
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Market to take queues from upcoming trust vote and oil prices
The week gone by was interesting for the Indian markets as after the equities were battered at the start of the week owing to the weak sentiment caused by political uncertainty, soaring crude oil prices and higher inflation, the benchmark indices made a smart recovery during the last two days. The market saw renewed buying as global markets surged as soaring crude oil prices showed sings of abatement falling below $130 mark after hitting record high recently. Sensex gained more than 1050 points in last two days of the week. For the week ended July 18, 2008, the BSE Sensex gained 1.2%, while the NSE Nifty added 1.1%.
The barometer index BSE Sesnex rose 165.55 points or 1.23% to 13,635.40 in the week ended Friday, 18 July 2008. The S&P CNX Nifty edged up 43.25 points or 1.06% to 4,092.25 in the week. The BSE Mid-Cap index shed 125.95 points or 2.35% to 5,239.39. The BSE Small-Cap index fell 257.77 points or 3.84% to 6,455.89.
Foreign institutional investors (FIIs) sold shares worth Rs 2,235.70 crore in the month of July 2008 so far, till 17 July 2008. FIIs sold shares worth Rs 27,701 crore in the calendar year 2008. Mutual funds have bought shares worth Rs 522.90 crore in the month of July 2008 so far, till 17 July 2008.
Inflation based on the wholesale price index rose 11.91% in 12 months to 5 July 2008, just above the previous week's annual rise of 11.89%, government data released today, 17 July 2008, showed. It is the highest reading since annual numbers in the current series became available in April 1995.
Reserve Bank of India on 24 June had hiked both repo rates and cash reserve ratio by 50 basis points each to tame rising inflation. There are expectations of further monetary tightening in quarterly monetary policy review of RBI scheduled on 29 July 2008.
Industrial production rose 3.8% in May 2008, much lower than revised 6.2% growth in April 2008, the government data released on Friday, 11 July 2008, showed. Industrial production growth for April 2008 revised downwards to 6.2% from earlier 7%.
Going ahead, the market will take cues from the outcome of the government’s vote of confidence in parliament scheduled on 21 July 2008 and 22 July 2008. Survival of the government in the vote of confidence will boost bourses. Movement of crude oil prices also holds key. Fears of further monetary tightening by the Reserve Bank of India continue to haunt bourses.
Market to take queues from upcoming trust vote and oil prices
The week gone by was interesting for the Indian markets as after the equities were battered at the start of the week owing to the weak sentiment caused by political uncertainty, soaring crude oil prices and higher inflation, the benchmark indices made a smart recovery during the last two days. The market saw renewed buying as global markets surged as soaring crude oil prices showed sings of abatement falling below $130 mark after hitting record high recently. Sensex gained more than 1050 points in last two days of the week. For the week ended July 18, 2008, the BSE Sensex gained 1.2%, while the NSE Nifty added 1.1%.
The barometer index BSE Sesnex rose 165.55 points or 1.23% to 13,635.40 in the week ended Friday, 18 July 2008. The S&P CNX Nifty edged up 43.25 points or 1.06% to 4,092.25 in the week. The BSE Mid-Cap index shed 125.95 points or 2.35% to 5,239.39. The BSE Small-Cap index fell 257.77 points or 3.84% to 6,455.89.
Foreign institutional investors (FIIs) sold shares worth Rs 2,235.70 crore in the month of July 2008 so far, till 17 July 2008. FIIs sold shares worth Rs 27,701 crore in the calendar year 2008. Mutual funds have bought shares worth Rs 522.90 crore in the month of July 2008 so far, till 17 July 2008.
Inflation based on the wholesale price index rose 11.91% in 12 months to 5 July 2008, just above the previous week's annual rise of 11.89%, government data released today, 17 July 2008, showed. It is the highest reading since annual numbers in the current series became available in April 1995.
Reserve Bank of India on 24 June had hiked both repo rates and cash reserve ratio by 50 basis points each to tame rising inflation. There are expectations of further monetary tightening in quarterly monetary policy review of RBI scheduled on 29 July 2008.
Industrial production rose 3.8% in May 2008, much lower than revised 6.2% growth in April 2008, the government data released on Friday, 11 July 2008, showed. Industrial production growth for April 2008 revised downwards to 6.2% from earlier 7%.
Going ahead, the market will take cues from the outcome of the government’s vote of confidence in parliament scheduled on 21 July 2008 and 22 July 2008. Survival of the government in the vote of confidence will boost bourses. Movement of crude oil prices also holds key. Fears of further monetary tightening by the Reserve Bank of India continue to haunt bourses.
Sunday, July 13, 2008
Market to remain weak and volatile: Week Starting 14th July 2008
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The market shrugged off decision of Left parties to withdraw their support to the Congress-led United Progressive Alliance government on the hopes this would give government an opportunity to kickstart stalled economic reforms which Left had opposed for four years. However, a surge in crude oil prices, disappointing industrial production data and inflation climbing to more than 13-year high at the end of week played the spoilsport paring earlier gains of the week with the market ending with marginal gains in the week.
Sensex rose 15.85 points or 0.12% to 13,469.86 in the week ended Friday, 11 July 2008. The S&P CNX Nifty edged up 33 points or 0.82% to 4,049 in the week. The BSE Mid-Cap index added 87.10 points or 1.65% to 5,365.34. The BSE Small-Cap index rose 263.99 points or 4.09% to 6,713.66. Foreign institutional investors (FIIs) sold shares worth Rs 1,012.20 crore in the month of July 2008, till 9 July 2008. FIIs sold shares worth Rs 26,477.50 crore in the calendar year 2008. Mutual funds have bought shares worth Rs 712.30 crore in the month of July 2008 so far.
India’s second largest IT exporter by sales Infosys slumped 4.5% to Rs 1676.45 in the week. Infosys’ consolidated net profit as per Indian GAAP rose 4.2% to Rs 1302 crore on 6.8% growth in revenue to Rs 4854 crore in Q1 June 2008 over Q4 March 2008. Infosys has forecast 24.4% to 26.6% growth in earnings per share as per Indian GAAP at between Rs 98.79 to Rs 100.51 in FY 2009 over the year ended March 2008 (FY 2008). It has forecast a between 27.5% to 29.5% growth in revenue at between Rs 21278 crore and Rs. 21622 crore in FY 2009 over FY 2008.
Growth in Index of Industrial Production (IIP) of May has declined at 3.8% as against 10.6% in same period of last year, which is below expectations. May manufacturing growth was also down at 3.9% from 11.3% (YoY) and Capital Goods at 2.5% versus 22.4%.
Inflation based on the wholesale price index rose 11.89% in 12 months to 28 June 2008, above the previous week's annual rise of 11.63%, government data released on 11 July 2008, afternoon showed. It was at highest level in more than 13 years.
Crude oil has created a major havoc on global bourses. Crude oil for August delivery rose as much as $1.54, or 1.5%, to $143.19 a barrel on Friday 11 July 2008 on the New York Mercantile Exchange as Brazilian oil workers threatened a strike and on concern that Middle East and Nigerian supplies may be disrupted.
Political uncertainty will continue to haunt the bourses. Prime Minister Manmohan Singh is likely to seek a vote of confidence in parliament shortly following Left’s withdrawal of support to the government over the India-US civil nuclear agreement. There was speculation that the government may choose a date around 22 July 2008 to call a special Lok Sabha session for the vote.
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The market shrugged off decision of Left parties to withdraw their support to the Congress-led United Progressive Alliance government on the hopes this would give government an opportunity to kickstart stalled economic reforms which Left had opposed for four years. However, a surge in crude oil prices, disappointing industrial production data and inflation climbing to more than 13-year high at the end of week played the spoilsport paring earlier gains of the week with the market ending with marginal gains in the week.
Sensex rose 15.85 points or 0.12% to 13,469.86 in the week ended Friday, 11 July 2008. The S&P CNX Nifty edged up 33 points or 0.82% to 4,049 in the week. The BSE Mid-Cap index added 87.10 points or 1.65% to 5,365.34. The BSE Small-Cap index rose 263.99 points or 4.09% to 6,713.66. Foreign institutional investors (FIIs) sold shares worth Rs 1,012.20 crore in the month of July 2008, till 9 July 2008. FIIs sold shares worth Rs 26,477.50 crore in the calendar year 2008. Mutual funds have bought shares worth Rs 712.30 crore in the month of July 2008 so far.
India’s second largest IT exporter by sales Infosys slumped 4.5% to Rs 1676.45 in the week. Infosys’ consolidated net profit as per Indian GAAP rose 4.2% to Rs 1302 crore on 6.8% growth in revenue to Rs 4854 crore in Q1 June 2008 over Q4 March 2008. Infosys has forecast 24.4% to 26.6% growth in earnings per share as per Indian GAAP at between Rs 98.79 to Rs 100.51 in FY 2009 over the year ended March 2008 (FY 2008). It has forecast a between 27.5% to 29.5% growth in revenue at between Rs 21278 crore and Rs. 21622 crore in FY 2009 over FY 2008.
Growth in Index of Industrial Production (IIP) of May has declined at 3.8% as against 10.6% in same period of last year, which is below expectations. May manufacturing growth was also down at 3.9% from 11.3% (YoY) and Capital Goods at 2.5% versus 22.4%.
Inflation based on the wholesale price index rose 11.89% in 12 months to 28 June 2008, above the previous week's annual rise of 11.63%, government data released on 11 July 2008, afternoon showed. It was at highest level in more than 13 years.
Crude oil has created a major havoc on global bourses. Crude oil for August delivery rose as much as $1.54, or 1.5%, to $143.19 a barrel on Friday 11 July 2008 on the New York Mercantile Exchange as Brazilian oil workers threatened a strike and on concern that Middle East and Nigerian supplies may be disrupted.
Political uncertainty will continue to haunt the bourses. Prime Minister Manmohan Singh is likely to seek a vote of confidence in parliament shortly following Left’s withdrawal of support to the government over the India-US civil nuclear agreement. There was speculation that the government may choose a date around 22 July 2008 to call a special Lok Sabha session for the vote.
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Sunday, July 6, 2008
Weekly Market Update: 7th July 2008
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The markets ended the volatile week on a high. The indices shrugged off a sluggish start and powered ahead to close with handy gains. Nifty closed at 4,016 up 90 points, while the Sensex shut shop at 13,454 up 360 points.
Volatility is also likely to continue in coming week. In the near term focus may shift to earnings season as IT bellwether Infosys Technologies kickstarts June 2008 quarter earnings season on Friday, 11 July 2008. However tough macro economic environment comprising high inflation, record high global crude oil prices and rising interest rates will continue to weigh on the sentiment in near term.
The market sentiment will also remain under pressure in view of fluid political situation at the Centre after Left, the key ally of the UPA government, hardened its stand on the Indo-US nuclear deal threatening to withdraw support from the government, if it moved ahead to operationalise the deal.
However, market analyst’s feels that selling, which is coming from hedge funds, is tapering off because most of the redemption pressures which are there on them are over as of now. So, there is not too much of selling coming from Foreign Institutional Investors, or FIIs. It is possible to hold around 12,800 levels for the time being and try and inch up to 14,000-14,500. The reason for this is that inflation, to the level of 12.5-13%, is discounted by the market to a certain extent. Secondly, on the political front, things are slowly clearing up and by next week it should be very clear what sort of support is there. Again, India's monsoon has been 21% above average so far this season. A normal monsoon may lift farm production, which accounts for a fifth of the economy, and cool the nation's fastest inflation rate in 13 years.
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The markets ended the volatile week on a high. The indices shrugged off a sluggish start and powered ahead to close with handy gains. Nifty closed at 4,016 up 90 points, while the Sensex shut shop at 13,454 up 360 points.
Volatility is also likely to continue in coming week. In the near term focus may shift to earnings season as IT bellwether Infosys Technologies kickstarts June 2008 quarter earnings season on Friday, 11 July 2008. However tough macro economic environment comprising high inflation, record high global crude oil prices and rising interest rates will continue to weigh on the sentiment in near term.
The market sentiment will also remain under pressure in view of fluid political situation at the Centre after Left, the key ally of the UPA government, hardened its stand on the Indo-US nuclear deal threatening to withdraw support from the government, if it moved ahead to operationalise the deal.
However, market analyst’s feels that selling, which is coming from hedge funds, is tapering off because most of the redemption pressures which are there on them are over as of now. So, there is not too much of selling coming from Foreign Institutional Investors, or FIIs. It is possible to hold around 12,800 levels for the time being and try and inch up to 14,000-14,500. The reason for this is that inflation, to the level of 12.5-13%, is discounted by the market to a certain extent. Secondly, on the political front, things are slowly clearing up and by next week it should be very clear what sort of support is there. Again, India's monsoon has been 21% above average so far this season. A normal monsoon may lift farm production, which accounts for a fifth of the economy, and cool the nation's fastest inflation rate in 13 years.
Be a http://www.thestockworld.com user and get the host of stock market reports, updates, analysis, screeners for stocks traded in Indian bourses. SO LOGON NOW!!
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