Market Analysis: Weekly roundup till Dec 26

Written by: Super Admin
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Markets bounced back and gained nearly 4 pc during the week. It is rebounded on the news like rise in advance tax payments by India Inc and the Finance Ministers statement that the economy would grow around 8 pc this fiscal.

Sensex gained 640 points and closed at 17360 over its previous weekend"s close, while Nifty ended the week at 5178 netting a gain of 190 points over its previous weekends close.

During the week BSE Mid-cap index gained 2.6 pc, while Small-cap index gained 3.0 pc. Week"s top gainers were Metal and Oil & Gas indices by 6.8 pc and 4.8 pc respectively.

Going Forward

Markets are expected to be volatile in this week a head of derivative expiry of Dec series. Trading volumes will be low as foreign and local investors go on for year-end vacation.


RCom to raise Rs 6,300 crore for expansion
Reliance Communication (RCom) plans to scale up its wireless and enterprise business with an investment of over Rs.6,300 crore, under a plan internally branded as 'Edge 2010'.

Initially, RCom will raise a short-term debt of Rs 3,500 crore by issuing commercial papers (CPs) and non-convertible debentures (NCDs).

Its subsidiary, MacroNet Mercantile Pvt Ltd, will raise Rs 1,500 crore to finance imports of telecom equipment, modems, handsets, data cards, DTH and IPTV set-top boxes.

Reliance Communications Infrastructure (RCIL), which owns and operates internet infrastructure, plans to raise Rs 1,180 crore for building the country's largest data centre in Hyderabad, with a space of 250,000 square feet.

Overall, RCIL plans to have data centres with a total capacity of 400,000 square feet in the coming months.

M&M to invest $ 40 m in Chinese JV center
Mahindra & Mahindra (M&M) and its JV partner Jiangsu will invest $40 million to set up research and development center, an engine manufacturing plant and modernize factories at Yancheng in China.

In the JV (M&M) holds 51 pc stake through its subsidiary, Mahindra Overseas Investment Company (Mauritius).

Out of total investment of $40 million, approximately $18 million would be used to set up the R&D center and manufacturing plant. The plant which already exists has a capacity to produce 40,000 units.

Nava Bharat picks up 65 pc stake in Zambia coal mine
Nava Bharat Ventures has acquired a 65 pc stake in Zambia's largest coal mine for $26 million. The remaining stake will be with Zambian government"s investment holding company Copper Mines (ZCCM).

The consortium, which includes Nava Bharat Ventures and Zambian government plans to set up 300 MW coal-based power generation units by utilizing low grade coal from the mine at an investment of around $550 million.

The project will be funded through debt and equity. Nava Bharat will have an equity contribution of $108 million. It is also in talks with banks to finance the project.


Finance Minister sees 8 pc growth
According to the Finance Minster Green shoots are now firmly taking roots. Based on recent data"s, he expects India"s growth rate for the full year to be between 7.5 and 8 pc for the ongoing fiscal.

Economy recording a growth rate of 7.9 pc in the second quarter ending Sep 2009 and Mukherjee anticipating 8 pc growth for the full year.

Core sector logs 5.3 pc growth in Nov 2009
The six core industries grew at a 3-month high annual rate of 5.3 pc in Nov 2009, suggesting a possibly higher overall industrial growth for the month as these key infrastructure industries have a significant weight in the index for industrial production (IIP).

The growth is, however, partly overstated because of the base effect. Core sector, comprising six infrastructure industries crude oil, refining, coal, electricity, cement, and steel had grown at 0.8 pc in Nov 2008.

Out of the six-core industries, crude oil production was the only segment that clocked a negative growth. Petroleum refining showed a spurt in production as the domestic refineries stepped up production to meet the rising demand in local and overseas markets.

The International Energy Agency has already raised its oil demand growth forecast for next calendar year saying that there will be an increase in fuel consumption driven by countries such as India and China and also by the developed economies.


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