Markets at a glance

The Indian markets mirrored weak global markets amidst uncertainty over the proposed $700 billion bailout deal for the US financial sector and closure of Washington Mutual.

The Sensex shed 940 points or 6.99 per cent for the week to reach 13,102.18 and Nifty lost 260 points or 6.12 per cent to close at 3,985.25. Losses on account of index heavyweights (Ranbaxy Laboratories and Hindalco Industries hit 52-week lows on BSE) and sustained selling by FIIs (sold shares worth Rs 8,061 crore till September 25) were partly responsible for this weakness.

The market posted losses in four out of its last five trading sessions. Lower than expected inflation numbers (steady from a week before at 12.14 per cent) and possibility of a US Congress go-ahead to the US-India civil nuclear cooperation agreement did not do anything to recoup the losses.

What to expect this week

While the Indian indices take direction from global cues, the markets world over await further clarity on the US bailout package. The Indo-US nuclear deal has been postponed until October 4, which could be a negative.

The Q2 corporate results will start coming in from October and is being viewed by the market as an important trigger. The plateauing of inflation and cooling of crude prices will provide some solace.

Market rollover for September 2008 series and October 2008 series declined to 76 per cent (83 per cent seen in previous expiry) along with Nifty rollover at 63 per cent (75 per cent). The markets will be waiting for news on US consumer confidence index numbers and jobless claims this week. 

Stock to watch 

HCL TECHNOLOGIES
Last week’s close (Rs)	212.92
Prev. week’s close (Rs)	229.50
Week’s high (Rs)	238.50
Week’s low (Rs)	210.75
Last week’s ave. daily turnover (Rs cr)	25.97
Prev. week’s ave. daily turnover (Rs cr)	21.23
Number of up/down move	2/3

HCL Technologies (HCL) is expected to be keenly watched in the coming days, after the company made a counter offer to buy the SAP consulting company, Axon Group (Axon) for £441.1 million (around Rs 3,790 crore). HCL has made a cash offer of 650 pence for every share of Axon, as against Infosys’ bid of 600 pence.

Axon’s acquisition, which is termed as the largest takeover in the Indian IT industry, will catapult HCL to 12th position in terms of SAP implementation globally.

This acquisition would help HCL increase the share of its enterprise applications services from 11 per cent to around 30 per cent of the total revenues. To fund this buyout, HCL is planning to borrow about Rs 3,400 crore with the balance coming from internal accruals.