In the zone

Expectations of a timely monsoon and a possibility of interest rate cut by RBI saw the Sensex and Nifty in the buyers’ zone which was good news

The markets in the last week mainly remained in the buyers’ zone due to expectations of a timely monsoon and the possibility of interest rate cut by RBI. But sell off seen in the selected counters kept the markets away from more highs. Going forward Nifty has resistance at 8489 and 8542 and support at 8366 and 8305.

Sterlite technologies in the last week came out with better earnings, where its net profit jumped about fourfold. The net profit of the power and telecom gear maker stood at Rs 39.13 crore for the quarter that ended March 31 as compared to Rs 10.15 crore in the same period last year.

The company’s standalone income for the period under review increased by 51.62 per cent to Rs 979.10 crore from Rs 645.74 crore in the same period last year. The company said that it had a strong order book of Rs 4711 crore at the end of FY15 as compared to Rs 2521 crore in the previous year. The board has also approved a corporate restructuring plan.

Gabriel India announced its corporate numbers for the quarter that ended March 2015, where the net profit of the company rose 55.58 per cent to Rs 12.96 crore as compared to Rs 8.33 crore during the previous quarter that ended March 2014. The sales also rose 4.33 per cent to Rs 344.92 crore as against Rs 330.62 crore during the quarter that ended March 2014.

For the full year that ended March 2015, the net profit rose 40.89 per cent to Rs 62.02 crore as against Rs 42.60 crore in the same period last year. The sales was up 12.19 per cent to Rs 1429.84 crore in the year under review as compared to Rs 1274.52 crore in the previous year ended March 2014.

According to a study, the valuations of holdings by the domestic institutional investors in the NSE listed companies has rose to a six year high of Rs 10.21 lakh crore at the end of March. According to Prime Database, the DII holding in NSE listed companies were up 5.01 per cent at the end of March 31 as compared to 4.58 per cent on an aggregate basis.

In term of firms, Balmer Lawrie has the highest DII holding of 73.03 per cent which was followed by CARE (45.51 per cent), 3i Infotech (45.42 per cent), GTL infrastructure (38.16 per cent) and LT (36.09 per cent). The increase in the holdings was driven by the reform measures taken by the central government.

Last week, for global markets the main concerns was the possibility of rate hike by the US central bank. But weak data made investors think that the rate hike may cause delays. In the Federal Reserve’s minutes officials said it would be premature to raise interest rates in June. Also, in the Euro zone the investor’s focus was on the developments on Greece. All other markets around the globe were tracking US markets.

In the US markets, durables goods order, consumer confidence, new home sales, Markit services PMI, initial and continuing jobless claims and GDP are the ones to watch out. Economic sentiment, consumer confidence, business confidence and Industrial sentiments are the triggers to focus in the Euro zone area. For the Indian markets in the week ahead, data like current account, GDP and the infrastructure data may be main triggers.

Apart from this in the earnings corner, Igarashi motors, Tata Invest, Inox Leisure, Ushamart, Jyothy lab, Eclerx, KRBL, Bombay Dyeing, Heidelberg, Rpower, Tata motors, Dish TV, Dredging Corporation, BHEL, ABG Ship, IDBI, Suven Life, Tata Communication, Shalimar Paints, Selan, LT, EID Parry, National Aluminum, Gujarat Apollo, Asian Tiles and EI hotel are some of the companies to announce their earnings this week which could affect the market performance.

IT, Pharma and auto stocks may lead the rally and selective selling can be expected in cement and capital good stocks. Mid-cap and small cap stocks may remain range-bound during the week.
Gold is facing resistance at $ 1215.20, and a move above this will take the gold price towards $ 1225 and more per troy ounce.

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 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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