Markets at a glance

Markets were in consolidation mode for most of the week. Unemployment levels in the US were inching up to double digits and was a drag on the global markets on Thursday and Friday. In spite of this news, Indian markets closed in the positive territory on Friday.

Experts felt that a growth-oriented Railway Budget with government pledging investment in the railways and unchanged freight and passenger fares was the reason for the rally. Foreign investors who made net positive inflows since mid-March of around $7.5 billion pumped another $250 million in the first four days of the week. BSE Sensex ended flat for the week with gains of a per cent to close the week at 14,913.

Markets this week

The Union Budget would be the event that would decide the future direction of the market. The Budget could indicate the government's policy stance with major thrust on infrastructure and an easing of restrictions on foreign direct investment. An improvement in the Markit Purchasing Managers' Index (PMI) at 55.4 for June, significantly higher than the lows seen in December is a positive.

Although analysts expect markets to trade up, weak global cues could be a deterrent. The rupee strengthened significantly from 52.2 in early March to around 48 levels which could attract foreign inflows.

 

Stock to watch
JP HYDROPOWER
Last week's close (Rs) 92.42 Prev. week's close (Rs) 93.88 Week's high (Rs) 96.95 Week's low (Rs) 85.83 Last week's ave. daily turnover (Rs cr) 279.81 Prev. week's ave. daily turnover (Rs cr) 295.86 Number of up/down move 3/2

Shares of Jaiprakash Hydro Power would be in play this week after the company’s board approved the amalgamation of Jaiprakash Power Ventures (JPV) with the company.

Under the merger agreement, the shareholders of JPV would get three shares in the company. The merger will aide in increasing Jaiprakash Hydro’s balance sheet. Meanwhile, the company also plans to raise up to Rs 1,500 crore through issue of securities in the domestic and international markets.

This could ensure adequate funding for the proposed setting up of a 400-MW hydroelectric plant by JPV in North India. The stock is trading at 26.5 times its 12-month trailing EPS of around Rs 3.5.