A US government plan to buyout toxic assets and a $1 trillion spending by G20 to revive the world economy has ensured key Indian indices closed with gains for the fifth week in a row. BSE Sensex surged 455 points or 4.40 per cent to 10,804 and Nifty rose 131 points, or 4.1 per cent to 3,342 in a curtailed week on account of Mahavir Jayanti and Good Friday.
Midcap and smallcap counters were outperformers with BSE Mid Cap and BSE Small Cap indices gaining 7.5 per cent and 9.6 per cent respectively. However, industrial production growth fell 1.2 per cent in February whereas inflation stood at 0.26 per cent for the week ended March 28.
Markets next week
Positive cues from financial markets have helped domestic indices close with gains. Although, Indian markets would look at foreign shores for direction there are some near term issues. Apart from the political uncertainty ahead of parliamentary elections, Q4 results will be looked at by the markets keenly.
The quarterly results are expected to disappoint and major negatives on this front could lead dampen sentiment. However, foreign institutional investors have turned buyers recently and made net purchases of around Rs 656 crore up to Wednesday last week and this is a positive. A near-zero inflation and weak IIP numbers have raised the prospects of central bank further easing the monetary policy which could boost the market.
STOCK TO WATCH
ONGC
Last week’s close (Rs) 1,426.72
Prev. week’s close (Rs) 1,419.90
Week’s high (Rs) 1,463.00
Week’s low (Rs) 1,315.75
Last week’s ave. daily turnover (Rs cr) 315.08
Prev. week’s ave. daily turnover (Rs cr) 247.16
Number of up/down move 2/1
Infosys Technologies will be in action this week as the company’s board is meeting on April 15 to announce audited financial results for the quarter and year ended March 31, 2009. Analysts are expecting a drop in dollar revenue growth of around 1-3 per cent in Q4.
Whatever rupee depreciation benefits that the company was expected to make has been wiped off by cross currency headwinds. Although, net profit is expected to decline by 3-5 per cent, comparatively lower hedges (vis-a-vis software majors) is a positive.
Besides Q4, the market will be awaiting the guidance for FY10 which will give an indication of the extent of slowdown in the sector. At Rs 1,426, the stock is trading at 15 times its trailing twelve month earnings.
