Markets at a glance

The positive vibes of the coordinated fiscal and monetary measures announced earlier rubbed off on the markets initially, but they entered negative territory as Satyam Computer’s accounting scam came to light. Even the positive inflation numbers, which touched the 10 month low of 5.91 per cent, were not able to cheer the markets.

In fact, BSE closed lower by 552 points or 5.5 per cent to 9,406 during the week whereas Nifty lost 174 points or 5.7 per cent to 2,873. Apart from key indices, BSE Mid cap index lost 270 points or 8 per cent. FIIs were net sellers in equities to the tune of Rs 298 crore in a curtailed week. In a major development, Sun Pharma will replace Satyam on BSE 30 stocks. The stock closed with a weekly gain of 5 per cent.

What to expect this week

The hangover of previous week’s revelations of fudging of accounts in the Satyam Computer books, would keep the markets on the edge, this week as well. Further investigations and government action on this fiasco will also keep the markets interested.

The Q3 results this week of Infosys, HDFC Bank and Bajaj Auto would give an indication of the overall earnings trend. Even though the markets are factoring poor quarterly results on the back of high input costs, any positive surprises from bigwigs, can change the overall pessimistic mood.

 

Stock to watch
INFOSYS TECHNOLOGIES
Last week's close (Rs) 1,199.25 Prev. week's close (Rs) 1,131.52 Week's high (Rs) 1,265.80 Week's low (Rs) 1,140.83 Last week's ave. daily turnover (Rs cr) 383.42 Prev. week's ave. daily turnover (Rs cr) 155.56 Number of up/down move 3/1

Infosys would be in the spotlight with its Q3 to be declared tomorrow. Infosys being a bell-weather in the IT space would set the trend on the earnings outlook for this quarter in the aftermath of lower demand for IT services.

Besides the results, the negative developments at Satyam have raised speculation that several clients of the distressed IT firm may shift their business to other IT majors including Infosys.

Despite negative news on the IT front, Infosys gained around 6 per cent in the past one week. The stock is trading at around 15x of its trailing 12-month EPS.