Markets at a glance

Markets saw the biggest fall in the last eight months in the budget week. A lack of big-bang reforms under the shadows of high fiscal deficit disappointed the markets. BSE Sensex fell by around 1,400 points or 9.5 per cent to 14,913. A poor start to Monsoons assumes significance as experts term June as the driest month for many decades.

Weak global cues did not help matters. FIIs who were net buyers since March continued to make investments with net purchases of Rs 2,900 crore in the first four days of week ended July 10. Annual inflation based on the WPI fell to -1.55 per cent for the week ended June 27 consequent to certain manufactured goods turning cheaper.

What to expect this week

Infosys started the results season on a positive note. The market will take cues from the results of L&T and HDFC Bank, which are scheduled for this week. However, a section of market participants believe that buying could emerge at current levels.

Another positive is the May IIP figure, which beat market expectations and indicates that industrial activity is picking up. Compared to June, early July rains were better and analysts suggest a pick-up going ahead. However, global concerns have not evaporated with experts commenting that road to recovery might get delayed.

 

Stock to watch
Indian Hotels
 

HDFC Bank
Last week's close (Rs)	1,382.47
Prev. week's close (Rs)	1,516.08
Week's high (Rs)	1548.4
Week's low (Rs)	1360.6
Last week's ave. daily turnover (Rs cr)	162.5
Prev. week's ave. daily turnover (Rs cr)	169.70
Number of up/down move	39817.0
Number of up/down move	1/4

Indian Hotels (IHL) is likely to attract the attention of investors in the coming days after its subsidiary, Roots Corporation (Roots) has expressed its intentions to raise $75-100 million through the PE route by selling 20 per cent stake.

HDFC Bank could be in action on the bourses as it announces its results on July 14. On a higher base, loan growth is expected to be moderate (in single digits) implying a relatively subdued net interest income growth. However, good traction from other income would boost earnings.

Analysts expect net income and net profit to show a 30 per cent y-o-y increase each to around Rs 3,000 crore and Rs 600 crore, respectively. If actual results beat the estimates, further upside in the stock is not ruled out. At 1,369, the stock is trading at 3.8 times its 2008-09 book value of Rs 357.