Market Analysis: Weekly roundup till Dec 5

Markets closed higher by nearly 3 per cent, this week (Nov 30 to Dec 5) on the back of stronger than expected GDP-growth boosted the investor"s sentiment.

The Reserve Bank of India is expected to raise the growth outlook for the 2009-10 from the current estimates of 6 per cent after the surprising GDP growth in September quarter.

FII"s bought shares worth of USD 1,183 million in November taking the total inflow in this calendar year to more than USD 15 billion in Indian equity.

Sensex Gained 469 points and closed at 17101 over its previous weekend"s close, while Nifty ended the week at 5108 netting a gain of 167 points over previous weekends close.

During the week BSE Mid-cap index gained 4.5 per cent, while Small-cap index gained 6.6 per cent. Week"s top gainers were Realty and Health Care indices by 9.4 per cent and 6.6 per cent respectively.

Going Forward

Better than expected recovery in the Domestic economy and positive economic data from US should boost the sentiment. US unemployment rate dropped to 10 per cent in Oct 2009.

Global flows are expected to be robust. Investors keenly watch Industrial Production numbers to be released on Friday, Dec 11.

Corporate

RIL Topples ONGC as largest gas producer
RIL has become the largest natural gas producer in the country with its over 50 million standard cubic meters per day, surpassing ONGC.

RIL"s gas production from its D6 fields in the Krishna Godavari Basin touched 50.15 mscmd. KG D-6 output has also helped the nation cross 100 mscmd of domestic gas production.

RIL is targeting an output of over 80 mscmd by second half of the 2010 from D-6.

For ONGC, majority of gas comes from its basin and Mumbai Highfields. The two fields produce about 42 mscmd, together.

Maruti Suzuki to defend 50pc market share, plans big capex
Maruti Suzuki plans to increase its production capacity by up to 75 per cent over the next five years, to hold 50 per cent market share in the country"s passenger car market.

Once its second plant in Manesar is ready, Maruti will have a capacity to build one million cars by the end of this fiscal year.

The Company plans to manufacture 1.5 to 1.75 million units a year by 2015. Suzuki will decide on the investment in January. The company will require an investment of at least Rs 3,000-4,000 crore to add 5-7 lakh additional units.

Economy

GDP expands by 7.9 per cent during Q2 - beats all forecasts
Gross domestic product (GDP) grew by 7.9 per cent during the Jul-Sep quarter. The growth was driven largely by a pickup in manufacturing, increased government expenditure, robust investments and modest growth in farm output despite the drought.

The economy had grown 6.1 per cent in the first quarter. The growth in the first half of the year is 7 per cent as against 7.8 per cent during the same period a year ago.

The strong growth may put pressure on RBI to hike policy rates sooner than Mar 2010, on the back of rising inflation.

Dubai World"s debt not guaranteed by government
Dubai government said it hasn"t guaranteed the debt of Dubai World. According to Director General of emirate"s department of Finance, Dubai World received financing, based on it project schedule, not on a government guarantee.

He further added Lenders should bear part of the responsibility. Nakheel, Dubai World"s property unit whose 3.52 billion dollars Islamic bond is due Dec 14, asked the Nasdaq Dubai stock market on Monday to suspend its securities “until it is in a position to fully inform the market".

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