The government’s expectation of GDP growth rates between 8-9 per cent helped overcome the weak start to the week. Sensex rose 134 points or 0.89 per cent to 15,238 and Nifty ended flat at 4,583. The Sensex registered its 14th consecutive week of gains.
FII inflow in June totalled Rs 5,595 crore and positive inflows from March 2009 sustained the rally. Better-than-expected IIP number at 1.4 per cent for April and lower inflation of 0.13 per cent were other positive triggers for the week. However, weekend profit booking limited the gains.
Favourable economic data like the improving Markit Purchasing Managers Index for the second consecutive month in May could lift sentiment. With positive global cues, analysts expect gains in the short-term. Foreign funds that pumped Rs 25,000 crore from January this year can sustain the rally further. Market watchers believe that the Budget could affect sentiment in the coming weeks. The progress of the Monsoon will also be keenly watched. Higher-than-expected advance tax payouts will be a positive.
Stock to watch Indian Hotels
Last week's close (Rs) 75.40
Prev. week's close (Rs) 78.35
Week's high (Rs) 80.53
Week's low (Rs) 69.60
Last week's ave. daily turnover (Rs cr) 24.38
Prev. week's ave. daily turnover (Rs cr) 70.84
Number of up/down move 3/2
The acquisition of the Mumbai-based Hotel Sea Rock for Rs 680 crore will keep the Indian Hotels Company (IHCL) scrip in play this week. IHCL bought an 85 per cent stake in ELEL Hotels and thus got a controlling stake in the acquired hotel.
IHCL intends to demolish the existing structure and redevelop the site to integrate it with Taj Lands' End, which stands opposite the acquired property. The entire work is expected to be completed over the next three years.
IHCL would fund the hotel buy through proceeds from a recent rights issue. This acquisition is part of its plans to add nearly 1,800 rooms. At Rs 75.4, the stock is trading at 15.5 times its trailing 12-month EPS.
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