Upmove may continue but there would be hiccups: Weekly Market Report

Nifty may continue to rise if it manages a close above 5,710 on Monday

The market finished the week in the green on positive quarterly earnings reports from corporates but the gains were capped by the Reserve Bank of India’s (RBI) move to keep its key rates unchanged, in its monetary policy review earlier this week. Concerns about the rising fiscal deficit, as highlighted by the finance minister, also weighed on investors. The week ahead will have the last lap of earnings reports for the September quarter.
The Sensex closed the week at 18,755, a gain of 130 points (0.70%) and the Nifty settled 33 points (0.59%) higher at 5,698. A higher high on the Nifty and a close above 5,710 on Monday may result in the upmove continuing.
A late recovery helped the market close flat with the positive bias on the first trading day of the week. The benchmarks closed sharply lower on Tuesday as the RBI maintained a status quo on interest rates. The volatile market settled with modest gains on Wednesday on support from healthcare, auto and realty sectors.
The domestic market settled firm on Thursday on gains seen in the second half of trade. Upbeat global cues and support from capital goods, PSUs, auto and banking stocks saw the market settling over 1% higher on Friday.
The RBI on Tuesday cut cash reserve ratio CRR—the amount of deposits banks keep with the central bank—by 25 basis points (bps) or 0.25% to 4.25%. The central bank, however, kept other policy rates like repo rate, reverse repo rate and bank rate unchanged at 8%, 7% and 9%, respectively.
BSE Consumer Durables (up 5%) and BSE Auto (up 4%) were the top sectoral gainers while BSE Capital Goods (down 2%) and BSE Fast Moving Consumer Goods (down 1%) were the chief losers in the week.
Wipro (up 9%), Maruti Suzuki (up 7%), Bajaj Auto, Cipla and Dr Reddy’s Laboratories (up 6% each) were the top Sensex gainers. The main losers were BHEL (down 5%), Hindustan Unilever, ONGC (down 3% each), Larsen & Toubro (down 2%) and GAIL India (down 1%).  
The Nifty toppers were Wipro (up 8%), Maruti Suzuki, IDFC (up 7% each), Dr Reddy’s and Cipla (up 6% each). The major losers were BHEL (down 5%), HUL, BPCL, ONGC and Bank of Baroda (down 3% each).
The eight core industries—coal, crude oil, natural gas, petroleum refinery products, fertilizers, steel, cement and electricity—logged a 5.1% growth in September, led by double-digit growth in coal and petroleum refinery products, government data showed on Wednesday.
During the corresponding month of 2011, the eight industries that have a combined weight of 37.90% in the index of industrial production (IIP), had registered a growth of 2.5%. The cumulative growth of the core industries during April-September 2012-13 period was 3.2% as compared 5% growth registered during the corresponding period of previous fiscal.
India’s manufacturing sector inched up in October 2012, driven by new orders, but persistent power shortages weighed on production. The HSBC India Manufacturing Purchasing Managers’ Index (PMI)—a measure of factory production—stood at 52.9 in October 2012, slightly up from September 2012, when it was 52.8. The index has remained above the 50-mark, below which it indicates contraction, for more than three years now.
On the global front, the US markets, which were closed on Monday and Tuesday due to the Hurricane Sandy, settled mixed with a negative bias. Early estimates of the economic impact of Hurricane Sandy put the total loss between $30 billion and $50 billion, making it one of the costliest storms in US history, according to a CNBC report. The US presidential election on Tuesday is expected to end the uncertainty in its market and economy.
Europe is expected to dominate the world economy as its sovereign debt crisis continues to linger. Investors are worried whether Italy and Spain would be able to continue paying their debts.


American Diary: Three Days to Go—A trip to Cincinnati

Can just 18 Electoral College votes decide the outcome of the next US President? How confident are the Republicans of the prospects of Governor Mitt Romney winning in Ohio?

We drive down on a crispy winter day to Cincinnati, a beautiful city on the banks of the Ohio River with parts of the city extending to Kentucky state. The city, situated in Hamilton County, is truly impressive with a mixture of high-rises and old style American buildings. The city is traditionally the reserve of the Republicans.


I get to speak with some operatives at their offices who seemed confident of capturing Ohio. When I tell them of the Democratic operatives’ claim that President Obama is leading, though narrowly in the polls, they tell me that it is a dead heat as President Obama and Governor Mitt Romney are virtually tied. In order to become the President, 270 electoral votes are required and so it is certainly possible. However, the Republican operatives do not believe that it will come to that. They are quite confident because the gap has narrowed from the double digit lead Obama had a couple of weeks ago. Moreover, the Republicans are also likely to have more money to spend on advertising and such during the last phase of the election.


Ohio is the workshop of America with a lot of top companies, including Procter & Gamble, headquartered here. Her economy is doing better than other parts of America with unemployment rate less than the national average. President Obama’s bailout of the automotive industry (aka Detroit) has had a direct impact in Ohio as it is the home for a lot of ancillary companies, resulting in return of manufacturing jobs. There is also a rising tide of Indians, Arabs and other immigrants which can help the president’s cause. There is no sense of an economic crisis here as evidenced in other parts of America


Ohio has always been regarded as a bellwether state. There’s a saying—as goes Ohio so goes America. The president won Ohio handily in the last election has to hold on to it now. If Governor Romney wins then it will mean that the president’s ‘firewall’ has been breached. Its 18 Electoral College votes mean more than mere numbers. It might all come down to the turnout that each party is able to muster and the winner could be decided by just a handful of these votes.


(Harsh Desai has done his BA in Political Science from St Xavier's College & Elphinstone College, Bombay and has done his Master's in Law from Columbia University in the city of New York. He is a practicing advocate at the Bombay High Court.)


Review of India grows at night

Elegantly descriptive but inconsequential commentary about a weak State

Ever since...
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