This was a positive week for the markets and surprisingly strong in the face of the FNO expiry for the December series. There were no major negative cues from global as well as domestic front and markets took hold strongly above 20000.
Sessions overall were ranged after a sharp run up seen in thebeginning of the week. Most fund managers and investors in holiday mood were less involved. It was a holiday shortened week. Market terms this as santa rally and had indicated that last week that one could have expected that. We had a major event. Gujarat elections came in favour of BJP - on Modis leadership despite the anti-incumbency factor. Global credit woes continued there cry but US showed some resurgence on good corporate earnings. The F&O settlement also kept session ranged and choppy. December was a ranged month with FIIs outflow and that will keep investors worried.
Sensex closed up over 5% this week. Weekly losers for the were Bajaj Auto -6.36%,Tata Motors -7.07% while gainers ruled the with TISCO 13.24%, REL 10.7%, DLF +10.5%, Bhel +8.49%, Hindalco +7.46%, HDFC+7.34%,WIPRO 7.13%, RIL 7.13%,MNM 6.4% ICICI BNAK 6.31%, HDFC 5.54%, SBI 5.38%, NTPC 5.27%,Satyam 5.2%, Infy 5% LNT 4.29%,ITC 4%, Ambuja Ceme +3.71%,Rcom 3.61%, TCS 3.5%, Bharti +2.56%. BSE Midcaps 4.47%, BSE Small Caps 6.9%
Politics: Elections are nearing. Gujarat election was first step toward this . The BJP is seen in a strong position now in Himachal Pradesh as well. A strong BJP certainly will be an obstacle for the Nuclear deal It is likely to keep the Congress defensive and delay elections as much as possible. The Budget is the next important event and that may be a disappointment. The Congress may make this populist.
Common man is likely to be the nucleus for the budget and that means focus would be on giving more to him. Inflation is another area of action. This has been under control but more because of a base effect. inflation remains a concern and it is a supply side issue. Food articles have seen a major upsurge and this is on the back of poor agriculture growth. Agriculture thus would be an area of focus. Crude is at an all time high and it would be really difficult for Govt. to cope up with this. If the Govt. doesnt hike petrol and diesel pricesit would only postpone the problem. If it does hike then the Govt would face the ire of the Left and certainly it cant afford this when elections stare it in the face. This would be a big issue going ahead and certainly there are no easy answers. The easy way out is not the best one Economically for the country.
Some Geo political issues surfaced with Pakistan's Former Prime Minister Benazir Bhutto was assassinated. This means some risk from this angle as well and increased probable Militancy. However, such issues are unlikely to impact markets in any big way. At least not yet !
Cement counters regained strength post the MTPC probe for forming cartelisation. The Long term view still remains positive but valuations remain highly demanding.
Telecom stocks managed to hold on. The license and spectrum issue continues and things would be though ahead.
IT stocks saw some revival. Results are just ahead and they have risen on hope. On the face of results may appear positive but we believe that headwinds are still high in the form of an appreciating rupee, rising salary costs and poor business conditions nearing for clients. Banking sector remains a big sector exposure for the IT sector and the situation is not good.
Karuturi continued to circuit. The company is the largest manufacturer of flowers post the Kenyan acquisition. The numbers would flow in top line and bottom line from this quarter. Flowers is really localised and fragmented business. But Karuturi has really done great job and is now a global company. Our research note would give you better idea on this.
Adhunik is another success story. The company is into speciality steel back by iron ore mines. The story here is that it seems to be the only other mining play such as Sesa Goa and valuations remain undemanding.
We had our research on WWIL this week. WWIL is a Multi Service Operator (MSO) and one of largest player in Cable and Satellite industry (C&S). However this industry is dominated by Local Cable Operators (LCO?s). The Goon squad background and the political backing of the of cable operators has made it difficult for MSOs to breakdown the LCOs chain. The industry is also highly fragmented and there are no signs of consolidation yet. Digitalisation is the only way of transition. Do read our note so as to know what action needs to be taken here.
Fedder Lloyd is another interesting story. It is a niche player in India and caters to Defense and Railways. It has also forayed into Real Estate which seems to be a worry... but it can be also an opportunity. Our note would tell you more about this.
Sessions overall were ranged after a sharp run up seen in thebeginning of the week. Most fund managers and investors in holiday mood were less involved. It was a holiday shortened week. Market terms this as santa rally and had indicated that last week that one could have expected that. We had a major event. Gujarat elections came in favour of BJP - on Modis leadership despite the anti-incumbency factor. Global credit woes continued there cry but US showed some resurgence on good corporate earnings. The F&O settlement also kept session ranged and choppy. December was a ranged month with FIIs outflow and that will keep investors worried.
Sensex closed up over 5% this week. Weekly losers for the were Bajaj Auto -6.36%,Tata Motors -7.07% while gainers ruled the with TISCO 13.24%, REL 10.7%, DLF +10.5%, Bhel +8.49%, Hindalco +7.46%, HDFC+7.34%,WIPRO 7.13%, RIL 7.13%,MNM 6.4% ICICI BNAK 6.31%, HDFC 5.54%, SBI 5.38%, NTPC 5.27%,Satyam 5.2%, Infy 5% LNT 4.29%,ITC 4%, Ambuja Ceme +3.71%,Rcom 3.61%, TCS 3.5%, Bharti +2.56%. BSE Midcaps 4.47%, BSE Small Caps 6.9%
Politics: Elections are nearing. Gujarat election was first step toward this . The BJP is seen in a strong position now in Himachal Pradesh as well. A strong BJP certainly will be an obstacle for the Nuclear deal It is likely to keep the Congress defensive and delay elections as much as possible. The Budget is the next important event and that may be a disappointment. The Congress may make this populist.
Common man is likely to be the nucleus for the budget and that means focus would be on giving more to him. Inflation is another area of action. This has been under control but more because of a base effect. inflation remains a concern and it is a supply side issue. Food articles have seen a major upsurge and this is on the back of poor agriculture growth. Agriculture thus would be an area of focus. Crude is at an all time high and it would be really difficult for Govt. to cope up with this. If the Govt. doesnt hike petrol and diesel pricesit would only postpone the problem. If it does hike then the Govt would face the ire of the Left and certainly it cant afford this when elections stare it in the face. This would be a big issue going ahead and certainly there are no easy answers. The easy way out is not the best one Economically for the country.
Some Geo political issues surfaced with Pakistan's Former Prime Minister Benazir Bhutto was assassinated. This means some risk from this angle as well and increased probable Militancy. However, such issues are unlikely to impact markets in any big way. At least not yet !
Cement counters regained strength post the MTPC probe for forming cartelisation. The Long term view still remains positive but valuations remain highly demanding.
Telecom stocks managed to hold on. The license and spectrum issue continues and things would be though ahead.
IT stocks saw some revival. Results are just ahead and they have risen on hope. On the face of results may appear positive but we believe that headwinds are still high in the form of an appreciating rupee, rising salary costs and poor business conditions nearing for clients. Banking sector remains a big sector exposure for the IT sector and the situation is not good.
Karuturi continued to circuit. The company is the largest manufacturer of flowers post the Kenyan acquisition. The numbers would flow in top line and bottom line from this quarter. Flowers is really localised and fragmented business. But Karuturi has really done great job and is now a global company. Our research note would give you better idea on this.
Adhunik is another success story. The company is into speciality steel back by iron ore mines. The story here is that it seems to be the only other mining play such as Sesa Goa and valuations remain undemanding.
We had our research on WWIL this week. WWIL is a Multi Service Operator (MSO) and one of largest player in Cable and Satellite industry (C&S). However this industry is dominated by Local Cable Operators (LCO?s). The Goon squad background and the political backing of the of cable operators has made it difficult for MSOs to breakdown the LCOs chain. The industry is also highly fragmented and there are no signs of consolidation yet. Digitalisation is the only way of transition. Do read our note so as to know what action needs to be taken here.
Fedder Lloyd is another interesting story. It is a niche player in India and caters to Defense and Railways. It has also forayed into Real Estate which seems to be a worry... but it can be also an opportunity. Our note would tell you more about this.
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