Markets at a glance

Markets opened weak but made sustained gains during the course of the week. A recovery of global markets and favourable cues from government pushed up the broad indices. FM’s statements on disinvestment and clarifications on borrowing programme were perceived as positive by the markets.

Sensex inched up 1,250 points during the week and marked the biggest weekly gain since May 24 mustering 9.2 per cent return over the previous week. Nifty also surged with 9 per cent plus returns. The quarterly results announced until now were in line with market expectations and this capped any downside. The good progress of the monsoon also contributed to positive sentiment.

Markets this week

Analysts expect the markets to extend the gains of the previous week. The progress on the disinvestment front, revival of monsoons and a pick-up in the economic activity would support the stock rally. The finance secretary sees economic growth at 7 per cent and inflation at 2-3 per cent for 2009-10.

With earnings season in progress, companies like Wipro, Reliance Industries, Bharti, HDFC, Ranbaxy would declare their June 2009 quarterly results this week. Global cues have turned positive with Fed’s optimism on the US economy. Foreign investors could also make a difference. At the net level, they purchased Indian shares worth Rs 1,960 crore in the first four days of the week.

 

Stock to watch
RELIANCE INDUSTRIES
Last week's close (Rs) 1,935.23 Prev. week's close (Rs) 1,776.78 Week's high (Rs) 1,967.50 Week's low (Rs) 1,717.70 Last week's ave. daily turnover (Rs cr) 948.95 Prev. week's ave. daily turnover (Rs cr) 1,231.38 Number of up/down move 3/2

Shares of Reliance Industries (RIL) would be in play due to the Supreme Court hearing on RIL-RNRL July 20, 2009. Besides, the June quarterly results scheduled on July 24 would also be closely watched.

The results are expected to be tepid with lower refining margins. Analysts expect gross refining margins (GRM) at $8-8.2/barrel. The lower GRMs would impact revenue growth in this quarter.

It is felt that revenues could slip 18-22 per cent, however, net profit is estimated to be flat. The stock is trading at 20 times its 12-month EPS of Rs 99.