Markets at a glance

The week started on a good note with markets touching 14-month highs. Concerns over monsoons spurted as cumulative deficit between June and August widened to 25 per cent from 19 per cent a week earlier, triggering a sharp sell-off during the latter half. BSE Sensex lost 510 points or 3.26 per cent to 15,160, while Nifty declined 155 points or 3.34 per cent to 4,481.

Weak Chinese markets also played spoilsport. Compared to larger indices, midcap and small cap losses were lower. FIIs who were net buyers since March, sold Rs 43 crore in the first four trading days of August at the net level.

Markets this week

Analysts believe that markets could consolidate in the near term as concerns of monsoons persist. Nevertheless, strong corporate performance could cap the downside. US unemployment data shows that fewer jobs were lost for the month of July and this could be a positive when the market opens on Monday. On the domestic front, it would be interesting if June IIP data can throw up positive surprises as was the case in May. An uptick in FII buying could also be a positive. However, a strong NHPC IPO issue opening last week could weigh on the markets as it could mean a diversion of funds from the secondary markets in the near term.

 

Stock to watch
Indian Hotels
 

Adlabs Films
Last week’s close (Rs)	331.65
Prev. week’s close (Rs)	344
Week’s high (Rs)	19-Dec
Week’s low (Rs)	330.0
Last week’s ave. daily turnover (Rs cr)	68.2
Prev. week’s ave. daily turnover (Rs cr)	144.2
Number of up/down move	39,847.0

Shares of Adlabs Films could come into play on plans to raise money from a rights issue. A board meeting on August 12 would consider raising long- term resources through a rights issue. Further details like issue size and funds usage are awaited.

This meeting also assumes significance on the backdrop of Reliance ADAG group sealing a deal with Steven Spielberg to produce five to six films per year with first of its releases slated in 2010. Adlabs being a premier exhibitor dealing with post production work is expected to benefit from the deal.

However, June quarter results were poor due to deadlock that existed between producers, distributors and exhibitors. The dispute, which lasted over two months meant that no new Hindi movies was released for that period impacting the company’s financials.