Market Analysis: Weekly roundup till May 8

Worsening debt turmoil in Europe, has dragged down the markets. Sensex lost 4.5 per cent and closed at 16769 during the week, while Nifty ended the week at 5018 losing by 4.9 per cent over its previous weekends close.

During the week BSE Mid-cap and Small-cap indices lost 4.9 per cent and 5.4 per cent respectively. All the sector indices closed in red. BSE Metal and Realty indices was the top loser, down by 9.6 per cent and 9.5 per cent respectively during the week.

Major world indices came under pressure amid concerns that the financial mess in Portugal, Ireland, Greece and Spain (PIGS) could spread to more European nations. US job data in April released in the last week showed the fastest growth in four years. Due to debt concerns in Euro zone the stock market took little notice of it. American indices fell 6% in value in the last week.

Going Forward

RIL will set the tone for the market this week on the back of verdict in between RIL and RNRL is in favor of RIL. Investors are keenly eyeing on global macro news.

The overall tone for the markets this week could be cautious, with benchmark indices falling 5 per cent in the last week.

Mar 2010 Industrial Production and Inflation in Apr 2010 will be closely watched by the investors during the week. The US and Eurozone, UK and China are also scheduled to announce their industrial production data this week.

Corporate

Sterlite tech plans Rs 9,600-cr LCD project in Maharashtra
Sterlite Technologies, will set up an LCD (liquid crystal display) factory in Maharashtra at an investment of Rs.9,600 crore. The state-run Maharashtra Industrial Development Corporation has offered 50 acres in the Shendre industrial estate near Aurangabad and at Chincholi near Solapur.

Sterlite may choose the Chincholi site, as it is nearer to the gas pipeline of Reliance Industries. Sterlite has requested the state government for assured continuous availability of piped natural gas at subsidized rates for 10 years and availability of up to 10 Mw of power at subsidized rates. Besides, the company looks for fiscal benefits such as a tax holiday, relaxation in import duties for raw materials and other tax incentives.

Renault, Bajaj car at 2,500 dollars
Renault and Bajaj Auto have agreed to price the ultra low-cost (ULC) car that they are jointly developing with Nissan at $2,500 (around Rs 1.10 lakh) to take on Tata Nano. Renault and Nissan are developing an ultra low-cost vehicle with the Bajaj group, benefiting from its expertise in light vehicles and the knowledge of the Indian market. The partners have resolved the issues on pricing, which had been widely speculated as the reason for the delay in the project announced in 2008.

Originally, the car was scheduled to hit the market this year, but that has been postponed to 2012. It will take on Tata Nano, currently available in a price range of Rs 1.23 lakh-1.72 lakh (ex-showroom, Delhi) for three variants.

Economy

India's exports may cross $170 bn in 2009-10
The government value"s India's exports for 2009-10 may fall short of the previous year's figures on account of the global economic slowdown, but it will cross the USD 170 billion. The country"s exports for 2008-09 amounted to USD185 million. Due to the global slowdown, the country's exports kept contracting for 13 months in a row since Oct 2008. However, it entered into positive territory in November last year.

Government"s stimulus packages, besides policy intervention by Commerce and Industry Minister, helped exporters counter the global demand slowdown. Since December 2008, the Centre had announced a string of measures, such as interest subsidy for exporters, to tackle the financial crisis. In August 2009, more sops like market-linked incentives were announced in the Foreign Trade Policy.

EU races to ready emergency fund before Asian markets opens
European Union finance ministers pledged to stop a sovereign debt crisis from shattering confidence in the euro as they held an emergency summit to hammer out a lending mechanism for deficit-stricken nations.

After Euro droped to 14-month low and soaring bond yields in Portugal and Spain last week, the leaders of 16 Euro nations agreed to fund the 440 billion euros ($570 billion) for debt stricken nations.

Europe"s failure to contain Greece"s fiscal crisis triggered a 4.1 percent drop in the euro last week, the biggest weekly decline since the aftermath of Lehman Brothers Holdings Inc"s collapse.

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