Market Analysis: Weekly roundup till Jan 9
Markets ended the first week of 2010 with posting gains. Key benchmark indices touched a 22 month high on the back Prime Ministers comments on returning of India"s economic growth to 9 to 10 per cent by couple of years.
Stocks kicked off on Monday, Jan 4 on an upbeat note of strong auto sales numbers for Dec 2009 month, jump in manufacturing activity in Dec 2009 and also surge in exports in Nov 2009.
Sensex gained 75 points and closed at 17540 over its previous weekend"s close, while Nifty ended the week at 5244 netting a gain of 43 points over its previous weekends close.
During the week BSE Mid-cap index outperformed the BSE Sensex by gaining 228 points. The Small-cap index also gained 340 points over the previous weekend"s close.
Week"s top gainers were BSE Auto and Consumer Good indices by 1.1 per cent and 0.7 per cent respectively.
Going
Forward
Earnings
from
Infosys
Technologies,
TCS,
Bajaj
Auto,
HDFC
Bank
and
few
others
are
expected
to
decide
the
mood
of
the
market.
Investors are hoping Dec 2009 quarter results will give them an insight of what to expect from domestic companies in the next few quarters.
Investors will closely watch comments of IT budgets from US companies, pricing scenario and outlook on rupee.
Corporate
Godrej
close
to
buying
Indonesia"s
Megasari
Godrej
Consumer
Products
(GCPL)
is
close
to
acquiring
Indonesian
household
products
company
Megasari
in
a
deal
estimated
to
be
worth
Rs.1200-1400
crore.
The funding for the Indonesian acquisition is through a combination of internal accruals and debt. The portfolio of Megasari, with annual sales of over Rs.600 crore, includes HIT insecticide, Stella air freshener and instant foods.
It has also placed an 'attractive' bid for the global pesticides business of Sara Lee Corp with which it has a joint venture in India.
The Godrej group is expected to buy out the US-based Sara Lee"s 51 per cent stake in the joint venture in March or April.
Godrej Sara Lee brands include Good Knight mosquito repellents, Kiwi shoe care products and the Brylcreem hair grooming range.
The Godrej group is also looking at further acquisitions in the home and personal care space in countries such as China, Mexico, Egypt, the Philippines and Brazil.
Telenor
ups
stake
in
Unitech
Wireless,
pays
Rs
1,493
cr
Telenor
has
acquired
additional
11.1
per
cent
stake
in
Unitech
Wireless,
a
subsidiary
of
Unitech,
for
about
Rs
1493
crore
through
a
fresh
issue
of
shares.
Considering its existing investment of Rs 2,620 crores, Telenor's total investment in Unitech Wireless now stands at Rs 4,113 crores and shareholding in the latter's total issued and paid-up equity share capital will increase from 49 per cent to 60.1 per cent.
Ashok
Leyland
JV
to
produce
die
castings
Ashok
Leyland"s
associate
company,
Ashley
Alteams
India
Pvt
Ltd
(AAIPL)
will
commence
manufacturing
high
pressure
die
castings.
The production of the castings, which will primarily be for the telecommunications and automotive sector, will begin next month at the company"s new facility in Chennai.
AAIPL is a joint venture that was formed in 2007 between Finland"s Alteam Group and Ashok Leyland, which is owned by the Hinduja Automotive Ltd (HML).
Alteam is a major telecommunication component supplier to Nokia.
HML has committed an investment of Rs.75 crore in the first phase of the new plant, entailing a work force of 1,000 employees engaged both directly and indirectly in the company"s operations.
The new business will cater to the strong demand for high pressure die castings in the telecommunication industry and also for the automotive industry.
Economy
Government
hints
stimulus
rollback
India
may
be
looking
to
withdraw
the
measures
it
took
to
boost
the
economy
during
the
global
financial
crisis,
as
it
seeks
to
put
its
fiscal
situation
in
order
following
an
improvement
in
the
economy.
Finance secretary Ashok Chawla hinted that the government may be looking at an exit from the stimulus.
Finance secretary"s statement assumes significance as the government has begun the annual budget exercise and will be finalizing the taxation and expenditure proposals and came just a day after the industry had asked the finance minister Pranab Mukherjee to continue the stimulus packages till at least the first half in the next financial year.
India had taken several measures such as cut in cenvat (the median excise duty rate) and service tax rates and borrowings finances higher spending to stimulate the economy hit by the global recession.
Food
price
inflation
cools
off
The
inflation
in
food
articles
dropped
to
18.22
per
cent
for
the
week
ended
Dec
26,
2009,
from
19.83pc
the
week
before,
as
per
the
data
released
by
the
commerce
ministry.
However, inflation in fuel segment increased to 4.85 per cent from 4.45 per cent in the week before as decontrolled industrial fuels became dearer following a rally in crude prices.
Though food inflation has started to moderate, the increase in commodity prices following a recovery in global economy could now lead to prices of manufactured products going up.
Carmakers and consumer durable manufacturers could increase prices as cost of key inputs such as fuel, copper, aluminum and steel is on the rise.
Prices of most are near 12-month highs.
The easing trend in food prices may keep headline inflation below their earlier projection of 8 to 8.5 per cent by end of Mar 2010 and does not see high fuel and commodity prices causing too much concern.
(An article by DAS CAPITAL MANAGEMENT & ADVISORS Pvt Ltd)