Pharma ranged, auto weak

STOCK MARKET WATCH

"The government may take a decision on hiking oil prices, as indicated by the petroleum secretary today. This may be detrimental for the auto companies already reeling under high input costs," a research analyst with a local brokerage said.

India's headline inflation rate fell marginally to 7.82 per cent in the week ended May 10 from a 42-month-high of 7.83 per cent a week earlier.

There are fears that interest rates may be hiked after banks start feeling the liquidity pinch. This may drag the auto sales in coming quarters, resulting in a subdued performance.

The market will also eye the January-March earnings of Mahindra & Mahindra, and Tata Motors, due on Wednesday, as any further increase in global steel and aluminium prices may further spoil their prospects.

Pharma: The shares of pharma companies are likely to trade sideways next week as defensive bets.

Dr Reddy's Laboratories is expected to continue its upward march with resistance at Rs 750-760, said Manas Jaiswal, technical analyst, Emkay Shares.

The stock surged this week after the company issued a 25 per cent revenue guidance for 2008-09. Sun Pharma may be in the limelight ahead of its January-March results on Friday.