Market Analysis: Weekly roundup till Jan 15
Markets ended on a positive note for the fourth consecutive week. IT Index surged on the back of higher earnings reported by Infosys. Public sector stocks ended with gains following talks on stake sale in some of them.
Sensex gained 14 points and closed at 17554 over its previous weekend"s close, while Nifty ended the week at 5252 netting a gain of 7 points over its previous weekends close.
During the week BSE Mid-cap index outperformed the BSE Sensex by gaining 1.2 per cent. The Small-cap index also gained 2.7pc points over the previous weekend"s close.
Week"s top gainers were BSE IT and PSU indices by 9.0 per cent and 2.1 per cent respectively.
BSE Bankex was the top loser down by 2.3 per cent over the previous weekend"s close due to fears that RBI may tighten monetary policy on the back of surge in Inflation.
Going Forward
Expectations of strong Dec quarter results and global liquidity flows may decide the mood of the market. Foreign investors pumped around Rs 4400 crore in the last week taking their total investments to Rs 8200 crore, in Jan.
The investors will keep an eye on any move from RBI to squeeze liquidity to control the Inflation.
Corporate
Wipro
to
float
USD
1bn
sponsored
ADR
issue
Wipro
Limited,
India"s
third-largest
software
exporter,
is
set
to
launch
a
sponsored
American
Depository
Receipts
(ADR)
offering
that
could
possibly
see
the
promoters
and
promoter
group
led
by
Azim
Premji
offloading
some
of
their
stake
in
the
company.
The company has been in active discussions with investment banks Goldman Sachs, Morgan Stanley, Credit Suisse and Citi to manage the proposed offering. The size of the issue could be above USD 1 billion.
Post the issue, it is expected that over 5 per cent of Wipro"s shares in the Indian market will get converted into ADRs.
The move is seen as a huge upside for its shareholders, as they will be able to sell their shares at a premium in the US market. The Wipro scrip surged to its 10-year high of Rs 752 on Thursday, Jan 14.
Bharti
to
buy
70
per
cent
stake
in
Warid
SUNIL
Mittal-owned
Bharti
Airtel
will
acquire
70pc
stake
in
Warid
Telecom
of
Bangladesh
for
USD
300
mn
(about
Rs.1,363
crore).
Warid Telecom, a wholly owned subsidiary of the Dhabi Group, offers mobile telecom services with a user base of over 2.9 million in Bangladesh.
This is Bharti"s first international buyout after it failed to clinch multi-billion dollar deal with South Africa"s MTN in 2009.
Economy
Wholesale
inflation
inches
up
to
7.3
pc
STEEL
and
zinc
joined
sugar
and
potatoes
to
take
inflation
for
December
2009
past
RBI"s
target
for
the
fiscal
year,
raising
the
odds
that
the
central
bank
could
resort
to
some
form
of
monetary
tightening
as
concerned
policymakers
try
to
curb
rising
prices.
Government data on Thursday showed inflation, as measured by the Wholesale Price Index, rose the most in more than 12 months to 7.31 per cent from a year earlier.
The inflation rate is ahead of RBI"s revised target of 6.5pc for the fiscal year. It was 6.15 per cent in 2009.
The acceleration in price rise, which began with rising food costs due to a poor monsoon, is spreading to industrial products as economic growth on the back of an easy money policy and low taxes lifts demand for cement, cars and steel.
IIP
at
two
year
high
of
11.7pc
Industrial
production
grew
at
a
two
year
high
11.7pc
in
Nov
2009,
putting
India
on
track
to
achieve
an
8pc
economic
growth
in
the
current
financial
year
and
strengthening
the
calls
for
a
hike
in
interest
rates
to
tame
rising
prices.
The better-than-expected industrial output growth, boosted by a massive 37.3pc jump in consumer durables and 12.2pc increase in capital goods, however, failed to lift the market that ended in the negative territory.
Industrial growth in Nov 2008 was a lowly 2.5pc, exaggerating the rate of expansion in Nov 2009. Output grew 10.3pc in October 2009.
The stellar output growth figure for November, however, is dwarfed by the 19.2pc growth reported by China for the same month.
Industrial output grew at its fastest pace since Oct 2007 as the economy began to consume and invest more, suggesting that it may no longer need the stimulus offered in the form of low interest rates and high government spending.
(An article by DAS CAPITAL MANAGEMENT & ADVISORS Pvt Ltd)