Markets at a glance

Despite RBI hiking interest rates during the week, the markets delivered the seventh week of gains in a row. RBI increased repo and reverse repo rates by 25 bps each to 5 per cent and 3.5 per cent, respectively. Further, the Indian markets turned a deaf ear to the ratings downgrade of Portugal by Fitch.

During the week, the BSE Sensex and the Nifty rose by 0.4 per cent each to 17,645 and 5,283, respectively. Mid caps and small caps underperformed the broader indices---the BSE Midcap and the BSE Smallcap fell by 0.02 per cent and 0.8 per cent, respectively. FIIs increased investments in the domestic markets; overall they invested about $2.5 billion in March.

Markets this week

With domestic triggers missing, the markets could look to global cues for future direction. The fourth quarter results and the forecast of southwest monsoon could be the next major triggers. Good rains this year after last year's drought will boost farm output and rural incomes.

Even though China is posting outflows, emerging-market equity funds combined took in a net $1.4 billion for the last week, a 10-week high, according to the latest data from global fund tracker EPFR Global. Standard & Poor's, last week, revised the outlook on India to stable from negative due to improved government finances. Food prices eased for the third straight week in mid-March while fuel inflation remained steady.

 

Stock to watch
PUNJ LLOYD

Last week’s close (Rs) 185.25 Prev. week’s close (Rs) 173.98 Week’s high (Rs) 186.85 Week’s low (Rs) 170.63 Last week’s ave. daily turnover (Rs cr) 87.35 Prev. week’s ave. daily turnover (Rs cr) 65.29 Number of up/down move 4/0

The Punj Lloyd counter may see some interest on news that the company wants to sell its stake in Pipavav Shipyard. Punj Lloyd holds 19.4 per cent stake in the shipyard company. The news report however has not been confirmed by the company. Given that the current market cap of Pipavav Shipyard at Rs 4,251 crore, Punj Lloyd's stake could fetch it Rs 825 crore.

As on March 2009, Punj had total debt of Rs 3,559 crore and debt to equity of 1.46 times. Punj reported a net profit of Rs 192 crore for the nine months ending December 2009 and paid Rs 246.2 crore in interest. Interest cost was up by 66 per cent compared to corresponding period last year.