Market Analysis: Weekly roundup till Sep 5th

Indian markets turned into consolidation mode after nearing the crucial 16000 resistance level. Both Benchmark indices lost more than 1 per cent in the week. After gaining 291 points on Friday, Sensex closed the week lower at 15689, a net fall of 233 points from its last weekends close. Nifty lost 51 points from its previous weekends close and finished at 4680.

FII"s pulled out Rs.904 crore in the first four days of the week. On global front, US stocks surged on Friday, despite, of Unemployment rate jumped to 26 year high of 9.7 per cent in August.

BSE Auto sector was the top gainer for the week by 4.5 per cent on the back of strong sales numbers in August month, followed by Reality by 0.2 per cent.

Inflation registered its lowest fall in the last three months. It has ended for the week August 22 moved up to-0.21 per cent from -0.95 per cent in the previous week. Inflationary pressures are starting to build up in the economy.

Going forward:

This week focus will be on the technical levels. Much of the domestic positive news factored, markets would continue to look at its international counter parts.

Corporate

Government handover Maytas Infra to IL&FS

Nearly six months after taking over control of Maytas Infra, the government allowed infrastructure major IL&FS to replace the B Ramalinga Raju family as promoters of the crisis-hit company.

The change in ownership will take place through a mix of direct equity holding and foreclosure of pledged shares. IL&FS is presently holding 14.5% shares directly in Maytas; it has been allowed to foreclose its rights on 22.6 per cent pledged shares, which would become the total holding to 37.1 per cent.

IL&FS will spend around Rs.150 crore to acquire the 22.6 per cent stake and plans to announce an open offer in a day or two. Open offer rate is based on Monday"s close. The company will also provide liquidity support of Rs.55 crore for next three months. It raises fresh capital at appropriate stage through QIP issue.

Tata Motors posts Rs.329 crore consolidated loss in Q1

Tata Motors reported Rs.329 crore consolidated loss for the June quarter as against Rs.720 crore profits in the corresponding period last year. The loss is from Jaguar Land rover (JLR) of Britain and its acquisition in last year June.

Net sales for the quarter increased by 13% to Rs.16290 crore. The company has repaid 150 million dollars out of the 1 billion dollars bridge loan rolled over in May, which has taken to buy JLR.

The company had a total debt of Rs.33850 crore at the end of this quarter. Out of that, Rs.22000 crore was for the automotive business. The rest included debt for the vehicle finance business.

Car sales zoom on festive fuel

Auto companies posted strong Auto sales numbers for the August month on the back of festive demand. Maruti Suzuki sales jumped 29 per cent to 69961 cars in august over 54113 cars sold in corresponding month last year. It also posted highest ever exports, which trebled to 14847 cars.

The growth of sale came from the A2segment cars Alto, Wagon R, Estilo, Swift and Ritz etc.

Hyundai India motor posted 13 per cent jump in domestic car sales to 24401 units, while exports increased by 9 per cent to 25120 cars as against same period last year.

Tata Motors car sales increased by 11 per cent to 17364 units in domestic market. The company sold 2501 Nanos in August and Indica sales went up by 24 per cent to 9598 cars.

Mahindra & Mahindra"s domestic sales for August increased by 17 per cent to 21140 units over 18322 units for the same period last year.

(An article by DAS CAPITAL MANAGEMENT & ADVISORS Pvt Ltd)