Markets at a glance

Markets got some positive news in the form of tax (excise as well as service) cuts announced by the government to revive demand. Government also announced measures to cheer up export-related sectors like leather, textiles, gems and jewellery. The markets seem to have taken the disappointing domestic GDP numbers (5.3 per cent growth y-o-y in Q3FY09) in their stride and ended up marginally higher.

The Sensex increased 48 points or 0.55 per cent to 8,891 during the week and Nifty grew 27 points or 1 per cent to 2,763. The only point of consolation for the markets was the falling Inflation numbers which touched a14-month low at 3.36 per cent.

What to expect this week

Domestic indices are likely to be affected by weak global markets. The US GDP shrank 6.2 per cent in Q4 and further news, that the US government will own up to 36 percent of Citigroup, would weigh down the markets. Apart from global cues, bludgeoning fiscal deficit estimates at 5.5 per cent of GDP is also a concern. Continuing FII sales (net sold $1.65 billion since beginning of the year) are a cause of concern and the markets will keep an eye out for FII activity. Markets could react positively if RBI cuts rates on the back of falling inflation numbers. 

Stock to watch
Indian Hotels
Last week's close (Rs) 1,265.55 
Prev. week's close (Rs) 1,253.48 
Week's high (Rs) 1,297.42 
Week's low (Rs) 1,201.22 
Last week's ave. daily turnover (Rs cr) 681.18 
Prev. week's ave. daily turnover (Rs cr) 707.63 
Number of up/down move 2/2

Reliance Industries shares could witness renewed action on the bourses on the news that the company’s board would meet today to discuss the merger of Reliance Petroleum with itself.

The merger would augment RIL’s position as one of the biggest integrated global energy majors. With the addition of RPL’s refining capacity (5.8 lakh barrels per day) to its fold, RIL’s combined capacity would be 12.4 lakh BPD.

The combined entity’s larger balance sheet and additional cash flows could be rolled out to shore up its oil & gas exploration investment plans. According to analysts, the merger would exploit both their operational synergies and a continuity in tax benefits. At Rs 1,265, the stock is trading at 12.65 times of its trailing 12-month EPS.