Thursday, January 26, 2012

BSE / NSE Weekly Review 20 Jan 2012




High volatility is expected in a truncated week ahead as traders roll over positions in futures & options segment as the January F&O contracts expire on 25th January 2012. The stock markets will remain closed on 26th January 2012, on account of Republic Day.

The RBI is widely expected to keep its key lending rate viz. the repo rate steady at the Third Quarter Review of Monetary Policy, scheduled on 24th January 2012, as headline inflation remains high. Investors’ focus is on Q3 results as well. The Q3FY12 results are likely to be weak due to lower volume growth in a slowing economy, higher raw material costs and higher interest charges. The focus will be on guidance from  the company managements on outlook for the remaining part of the year and for the next year.

Some of the companies declaring their results in the next week include L&T, Maruti Suzuki India, Sterlite Industries, Idea Cellular, GAIL and Kotak Mahindra Bank on 23rd January. Lupin, Cairn India, Grasim and Biocon on 24th January. Bank of Baroda, Sesa Goa, Union Bank of India, Rural Electrification orporation, Indian Hotels and Tata Communications on 25th January. Blue Star, NHPC, BHEL, NTPC, Bank of India and Canara Bank on 27th January




Indian Markets 
Strong results from HDFC Bank, ITC, Bajaj Auto, Wipro, TCS, HCL Technologies and Hero MotoCorp, and sustained buying by foreign funds pushed key benchmark indices to their highest level in more than six weeks. The S&P CNX Nifty moved past the psychological 5,000 level. Firm global stocks underpinned sentiment. The market gained in four out of the five trading sessions during the week ended 20th January 2012. Foreign institutional investors (FIIs) bought shares worth Rs 4441.37 crore in eight trading sessions from 10 to 19 January 2012, as per provisional data from the stock exchanges.

The BSE Sensex rose 584.39 points or 3.62% to 16,739.01, its highest closing level since 7 December 2011. The S&P CNX Nifty gained 182.60 points or 3.75% to 5,048.60, its highest closing level since 7 December 2011. The BSE Mid-Cap index rose 1.75%


Strong results from HDFC Bank, ITC, Bajaj Auto, Wipro, TCS, HCL Technologies and Hero MotoCorp, and sustained buying by foreign funds pushed key benchmark indices to their highest level in more than six weeks. The 50-unit S&P CNX Nifty moved past the psychological 5,000 levels. Firm global stocks underpinned sentiment. The market gained in four out of the five trading sessions during the week ended Friday, 20th January 2012.

Gains in world stocks triggered by stronger-than-expected GDP growth in China, the world's second biggest economy, in the fourth quarter of 2011, strong Q2 December 2011 results from IT major HCL Technologies and data showing buying of Indian stocks by foreign funds over the past few days, triggered a rally on the domestic bourses.

Trading for the week began on a positive note. Key benchmark indices registered small gains to reach 5-1/2-week closing highs on Monday, 16 January 2012 as the headline inflation hit 2-year low. This reinforced expectations that the central bank could start cutting interest rates in the coming months to revive slowing economic growth. The BSE Sensex rose 3.62% to 16,739.01and The S&P CNX Nifty gained 3.75% to 5,048.60, its highest closing level since 7 December 2011. The BSE Mid-Cap index rose 1.75% and the BSE Small-Cap index gained 1.71%. Both these indices under performed the Sensex.

Realty: 
The BSE Realty index rose 7.97% to close at 1708 levels. Among the heavyweights, Unitech, DLF, Oberoi Realty and HDIL gained 11.9%, 8.8% 8.7% and 8.3% respectively. India's largest realty firm by net profit DLF rose 8.8%. The company is reportedly planning to sell a convention centre project in Delhi and its wind power business for about Rs 1800 crore early next fiscal to reduce debt.

Metals: 
The BSE Metals index rose 4.10% to close at 11198 levels. All the industry majors were gainers. Hindaclo, Jindal Steel, Tata Steel and Coal India rose 7.7%, 6.4%, 5.0%, and 0.1% respectively.Metal stocks rose as data showing China's manufacturing gauge remaining in contraction mode in January 2012, boosted case for monetary policy easing in the world's second largest economy. Tata Steel rose 5.0%. The company  secured a major contract from Siemens Wind Power to supply 25,000 tonnes of high-quality profiled steel plate for wind towers.

Oil & Gas:  
The BSE Oil & Gas index rose 6.4% to close at 8325 levels. Among the heavyweights, Reliance, ONGC and Cairn India gained 8.4%, 5.9%, and 2.8% respectively. Reliance Industries jumped 8.4%. The stock surged after company said its board will consider a proposal for buyback of equity shares along with Q3 December 2011 earnings on Friday, 20th  January 2012. The last buyback program by RIL was done in the year 2004. Then, the company could only deploy around 5% of its planned purchase as the stock price had zoomed quite high.

Capital Goods: 
The BSE Capital Goods index rose 5.49% to  close at 9807 levels. Among the heavyweights, L&T, Siemens, and Bhel gained 8.6%, 4.1% and 2.6% respectively. Capital goods stocks rose on bargain hunting after a steep decline last month. India's largest power equipment maker by sales BHEL gained 2.6%. The company unveils its Q3 results on 27th January 2012. Larsen and Toubro is likely to register a 10%  growth in sales from its automation business in the next financial year

Bankex: 
The BSE Bankex index rose 5.9% in the week to close at 10912 levels. All the large players, namely SBI, Axis Bank, ICICI Bank, and HDFC Bank were gainers, gaining 8.7%, 7.3%, 6.7% and 4.1% respectively. Interest rate sensitive banking stocks rose on expectations that the Reserve Bank of India will start cutting interest rates in the coming months to prop up slowing economy. HDFC reported 31.4% growth in net profit to Rs 1429.70 crore on 35.6% increase in total income to Rs 8622.64 crore in Q3 December 2011 over Q3 December 2010. Bank said its asset quality remains healthy. The bank's capital adequacy ratio (CAR) remained strong at 16.3% as on 31 December 2011, against he regulatory minimum of 9%


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