Market Analysis: Weekly roundup till Jun 17
Sensex gained 0.7 per cent and closed at 17,955 during the week, while Nifty ended the week at 5,393 up by 0.8 per cent over its previous weekend"s closing values.
During the week BSE Mid-cap and Small-cap indices outperformed the benchmark indices gaining 1.1 per cent and 1.9 per cent respectively. The BSE Realty and Consumer Durables indices gained 5.4 per cent and 4.6 per cent respectively during the week.
BSE Oil & Gas and PSU indices were down by 1 per cent and 0.8 per cent respectively.
Going Forward
On Friday US indices fell more than 2.5 per cent after report showed that country"s consumer sentiment dropped to low levels since March 2009, increased the fears of recovery of economy.
Disappointing results from Bank of America and Citi Group increased the fears about country"s financial system. Investors keenly watch US economic readings such as National Association of Home Builders (NAHB) Housing Market Index etc, On Domestic front June quarterly results by some companies would be watched closely.
Corporate
Infy
net
profit
falls
2.4pc
in
June
2010
quarter
Infosys
net
profit
fell
2.4
per
cent
to
Rs.1,488
crore
for
the
Apr-Jun
2010
quarter,
while
revenues
increased
by
13.3
per
cent to Rs 6,198 crore. Infosys results raised the concerns over the strength of industry from the past years slump.
Increasing salaries, sliding prices and turmoil in the key markets of Europe could be the reasons to decline in profits.
The Company expected revenue of around 28% from the European region for the June quarter but it dropped to 25% and is
expected to be at 20 per cent. The Company revised its earnings forecast for March 2011 to Rs.26,441 crore-Rs.26885 crore. It will increase the head count of 36,000, during the financial year 2011.
RIL
looks
at
third
shale
gas
deal
in
North
America
RIL
is
looking
at
another
shale
gas
acquisition
in
North
America.
This
could
be
the
third
acquisition
in
three
months.
In
April, RIL acquired 40 per cent stake in Atlas Energy Marcellus Shale acerage for 1.7 billion dollars, committing a capital expenditure of 3.5 billion dollars over 10 years.
RIL picked up 45 per cent stake in Pioneer Natural Resources Eagle Ford shale acerage for 1.3 billion dollars in Jun 2010. Reliance had agreed to make an upfront payment of 266 million dollars in cash and contributes another 879 million dollarstowards Pioneer"s share of future drilling costs in the next 4-6 years.
L&T
on
track
to
bag
Rs
12K-crore
Hyderabad
metro
project
L&T
outbid
the
GVK
group
and
Reliance
Infrastructure
to
win
the
rights
for
implementing
a
metro
rail
system
in
Hyderabad.
The
Company will spend Rs 12000 crore to set up a 71.6km-long network. The Company will raise 30 per cent of the project cost as equity and the remaining as debt.
It has also asked Rs.1458 crore as viability gap funding (VGF) which is the lowest among all the bidders. VGF is the amount the central and state governments pay to an infrastructure project in the forms of grants to make it commercially viable.
Economy
Center
plans
VC
fund
for
drug
research
The
Central
Government
plans
to
set
up
a
Rs
10,000
crore
venture-capital
fund
for
supporting
drug
discovery
and
research
infrastructure development projects in the country. The fund to be managed by an independent asset management company will
come up under public and private partnership model, with government contributing 15 per cent of the total fund size. The funds will be made available to companies that are into drug discovery and research.
Industrial
growth
slows
to
11.5pc
The
Industrial
output
rose
at
its
slowest
pace
in
seven
months,
in
May
2010
at
11.5
per
cent
as
compared
to
16.5
per
cent
in
April
2010.
As per the industry experts, the manufacturing sector is showing the signs of average secular growth which continues to be good and would be favorable for the economy.
(An article by DAS CAPITAL MANAGEMENT & ADVISORS Pvt Ltd)