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A mixed bag, this

There were some highs and lows on Dalal Street, as political changes failed to bring much reversal of fortunes

The markets last week remained in range bound as mixed global cues and profit booking on the domestic front influenced it. The FIIs remained sellers which also added to the concerns. Nifty closed at 7229 on Friday down around 1.9 per cent on weekly basis. Nifty has support at 7118 below it may move towards 6800.

Government change
As a new government was sworn in at the centre, foreign investors remained buyers, and pumped in over Rs 14,000 crore in the Indian stocks.

According to SEBI, the overseas investors purchased shares worth Rs 84777 crore and sold equities worth Rs 70553 crore creating a net inflow of Rs 14224 crore ($ 2.4 billion) from May 2 to May 23. At the same time, they invested a net amount of Rs 12037 crore in the debt market.

The power trading solutions company PTC India came out with a good performance, reporting an 86 per cent rise in the net profit for the fourth quarter that ended March 31, 2014. The net profit stood at R 68.91 crore as compared to Rs 37.03 crore in the corresponding quarter last fiscal.

The total income of the company in the quarter under review rose around 30 per cent to R 2848.62 crore from R 2198.74 crore in the same period last fiscal. For the full year, the company’s net profit jumped 95 per cent to Rs 251.23 crore from Rs 128.74 crore last fiscal. The total income for the fiscal rose 30 per cent to R 11510.71 crore from R 8856.87 crore last fiscal.

Rise in profits
Vardhman Textiles, one of the leading textiles company in the country came out with its highest ever net profit for the year that ended March 31, 2014. The net profit of the company for the quarter that ended March 2014 stood at Rs 154.32 crore as compared to Rs 115.25 crore in the corresponding quarter last year.

For the year that ended March 2014, the net profit showed a 101.37 per cent rise to Rs 651.88 crore as compared to Rs 323.72 crore in the same period last year. The net sales of the company for the year ended that March 2014 was at Rs 5171.31 crore as compared to Rs 4159.71 crore for the financial year 2013, showing an increase of 24.32 per cent.

The board of directors recommended a dividend of R 6 per share on fully paid up equity shares of the company along with a special dividend of R 5 per share on the fully paid up equity shares. India’s Current Account Deficit (CAD) narrowed sharply on the account of decline in the imports was sharper than the exports.

The CAD of the country stood at $ 1.2 billion (0.2 per cent of GDP) in the fourth quarter of FY 2014 from $ 18.1 billion (3.6 per cent of GDP) in the same period last year and also lower than $ 4.2 billion (0.9 per cent of GDP) in previous quarter of FY 2014.

Some falls
In the balance of payments, merchandise exports declined by 1.3 per cent to $ 83.7 billion in Q4FY2014 as against an increase of 5.9 per cent in Q4FY2013. On the other hand, the imports were at $ 114.3 billion moderated by 12.3 per cent in Q4FY2014 as compared with a decline of 1 per cent in Q4FY2013. The gold imports were at $ 5.3 billion lower than $ 15.8 billion in Q4FY2013.

Last week, in the opening ,US markets rose on better housing data. Also news from China, that the country is planning mini stimulus measures to support the economy boosted investor confidence. Gold is weak and lost its key support at $ 1265 and may get support at $ 1250 and $ 1246. Gold has resistance at $ 1272 per troy ounce.

During last week, Infosys, BHEL, SBI, HDFC Bank and Tata Motors slumped either due to poor quarterly numbers or due to profit booking. The IT sector will remain subdued for some more time before making a turnaround. Investors can buy put options of these stocks in this week.

Alex K Mathews is the author of Financial Services And Systems, as well as Option Trading: Bear Market Strategies published by Tata McGraw Hill. He is also the technical and derivatives research head of Geojit BNP Paribas Financial Services Ltd. The author may have a vested interest in investments he has recommended. Feel free to e-mail him at alex@geojit.com. Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

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