The Weeks Weak Performance:Sensex gains 169 points:
The markets moved higher on alternate bouts of buying and selling. Due to some weak world-wide clue, the markets remained subdued on the last friday. But Asian markets dictated the trend on the domestic bourses for most of the week. On Wednesday, a strong Q1 result by IT major Infosys Technologies Ltd helped the market forget the impact of bomb blasts in Mumbai's local trains.
For the week ended Friday (14 July), the BSE Sensex settled 169 points (1.6%) up , to record 10,678.22. The S&P CNX Nifty rose 47.5 points (1.5%), to settle at 3,123.35.
Trading for the week began on a firm note. The Sensex jumped 175 points on Monday (10 July) on the back of a recovery in Asian markets, fall in crude oil price from a record high and a short-covering in the derivatives segment after Friday (7 July)’s sharp 258-point fall. Short-covering was witnessed in derivatives after a denial by the Prime Minister’s Office (PMO), after trading hours on 7th July, about rumours of Manmohan Singh's resignation.
The rumour had shaved off 258-pointsl in the Sensex on 7 July. A section of the market had gone short in Nifty futures following the rumour, in a bid to hedge their portfolio. On Tuesday 11 July, the Sensex shed 70 points.
Software major Infosys Technologies pulled the market on Wednesday (12 July), a day after a series of bomb blasts which rocked the financial capital, Mumbai, on Tuesday evening. On the back of strong Q1 results from the IT bellwether and its upward revision of FY 2007 (year ending 31 March 2007) earnings and revenue guidance, the Sensex jumped 316 points on 12 July.
The benchmark BSE Sensex shed 72 points on Thursday (13 July) as oil prices, moved towards a record high of above $ 75 a barrel, and weak global markets, weighed on market sentiment.
On Friday, the Sensex fell sharply by 180 points, to settle at 10,678.22. The market sentiment was weighed down by weak global markets and crude oil prices touching a record high of above $78 a barrel.
Infosys surged 6.36% to settle at Rs 1,650.75 following its upward revision in earnings and revenue guidance for FY 2007. The BSE IT sector index rose 6.88% for the week, to settle at 3,934.59. Infosys has forecast a between 38.3 - 39.6% growth in its FY 2006-07 (year ending 31 March 2007) consolidated EPS to between Rs 124.51 - Rs 125.74. The company had predicted 40.2% - 40.7% consolidated growth in FY 2007 revenue to between Rs 13,350 crore - Rs 13,400 crore.
The software major posted a 50.3% growth in consolidated Q1 June 2006 net profit to Rs 800 crore from Rs 532 crore in Q1 June 2005. Sales rose 45.5%, to Rs 3,015 crore from Rs 2,071 crore.
Hero Honda dropped 4.14%, to close at Rs 718.15 on disappointing Q1 results. Hero Honda’s net profit rose 16.2% in Q1 June 2006 to Rs 237.74 crore from Rs 204.45 crore in Q1 June, 2005. which was far below market expectations. Its sales rose 19.5% to Rs 2,364.37 crore (Rs 1,977.06 crore).
Cement shares edged higher on expectations of strong Q1 results. Cement companies are expected to report strong Q1 results on the back of firm cement prices and strong volume growth. Gujarat Ambuja shot up 6.79% this week to settle at Rs 106.95. ACC appreciated 5% to finish at Rs 834 for the week. India Cements gained a whopping 12.5% for the week to settle at Rs 185.15.
Metal shares advanced tracking firm metal prices on LME and on the back of hike in domestic prices. On Thursday, Hindustan Zinc hiked zinc prices by Rs 8,800 per tonne. The shares of Hindustan Zinc rose 5.77% to close at Rs 610.95. Hindalco rose 3.64% to settle at Rs 174.90. Sterlite Industries gained 4.88% this week to end at Rs 426.70. Monnet Ispat Ltd, the Jindal group flagship company into Power and Ferro alloys, also inched up.
Reliance Industries (RIL) gained 3.23% for the week to close at Rs 1,065.15. There are reports that the Mukesh Ambani-controlled Reliance Industries (RIL) is charting a new flight path for its mega retail foray. The company has set its sights on establishing a captive cargo airline venture to meet the logistic needs - particularly for transporting farm and dairy products - for its pan-India retail venture.
The markets in the following weeks will depend more on the global factors, and oil prices. Ranbaxy Laboratories touched the lowest point on 14 th July. This is amazing for a company of Ranbaxy's reputation and size. The stock has broken a major support at around Rs.342.
Hindustan Zinc remained somwhat buoyant on the last friday inspite of a overall in the market mood. The scrip is stated to do well in the next week.[With inputs from Internet]
Best wishes,
Suman Mukherjee
India.
www.bcozindia.com
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