The markets continued their positive run with the Sensex ending the week with gains of 473 points or 4.15 per cent to close at 11,876.43. The rally was driven by positive global cues and strong buying support from foreign institutional investors who have pumped in Rs 3,269.6 crore in May 2009. Investors seemed willing to take on risk which pushed up the BSE Midcap and Smallcap indices by 7.3 per cent and 8.5 per cent respectively.
Markets this week
The markets appear to be range bound and the Sensex has not been able to break significantly above 12,000. Investors are probably awaiting election results to be announced on May 16. Market participants expect higher volatility due to the uncertainty and will probably stay on the sidelines. FII inflows into the Asian region have been strong and India could continue to receive its fair share of money. Tata Teleservices (Maharashtra), Kotak Mahindra Bank, Chambal Fertilizers & Chemicals and State Trading Corporation of India are among the companies that will announce their results this week.
STOCK TO WATCH
HUL
Last week’s close (Rs)
232.97
Prev. week’s close (Rs)
234.65
Week’s high (Rs)
241.9
Week’s low (Rs)
229.43
Last week’s ave. daily turnover (Rs cr)
118.87
Prev. week’s ave. daily turnover (Rs cr)
133.53
Number of up/down move
2/3
As a defensive pick, Hindustan Unilever could witness action this week if the markets turn volatile ahead of the election results, expected on May 16, 2009.
On the operational front, HUL is reported to have lost market share in several categories of shampoo, toothpaste and skin care. Of course, these losses may have happened for low-end products and the company has taken some price cuts to boost volumes.
Analysts estimate an increase in sales and net profit in the March 2009 quarter, of 13-13.5 per cent and 17-18 per cent, respectively. The stock trades at a price to earnings multiple of 24.5x its trailing 12-month earnings per share.
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