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Investments from abroad and robust international buying has boosted profit bookings

Alex K MathewsThe markets were seen reaching new highs, thanks to buying witnessed by foreign institutional buyers.

Profit booking at higher levels was also seen.

Nifty on Friday closed at 8389, up around 32 points.

Near term
The markets are poised to move above 8415 in the near term, and it may test 8500 and 8565 levels sooner rather than later. Nifty has support at 8328 and 8296 in the short term.

On the back of strong revenues, Bharat Forge reported an 81 per cent jump in the net profit for the quarter that ended September 30, 2014. The net profit stood at Rs 174.50 crore as compared to R 96.40 crore in the same period last year.

The overall revenue of the company rose 34.7 per cent to Rs 1138 crore in the quarter under review as compared to Rs 845 crore in the corresponding period last year and the domestic revenues were up 15 per cent to Rs 411 crore. The export revenue jumped 50.5 per cent to Rs 697.50 crore on a yearly basis and the operating profit surged 45.9 per cent.

The net profit of Eveready Industries stood at Rs 17.64 crore for the quarter that ended September 2014 as compared to a net profit of Rs 3.7 crore in the same period last year. The net sales for the period under review stood at Rs 354.29 crore up 10.94 per cent from Rs 319.33 crore in the corresponding period last fiscal.

Mutual funds
For October 2014, the mutual fund managers raised their exposure in the banking stocks to an all time high after dropping their investment in September. According to the latest data available from SEBI, the MF investments in banking stocks as of October 31, rose to Rs 62718 crore, accounting for 19.91 per cent of the total equity Assets Under Management (AUMs) of R 3.15 lakh crore. The previous high was in August this year, when investment stood at Rs 56625 crore.

Consumer price index based inflation fell to 5.52 per cent in October, as compared to 6.46 per cent in the previous month, which was also its lowest rate since the releasing of data in February 2012. The data stood at 7.67 per cent in September 2013 and was at 12.93 per cent in October last year.

Most of the food sub groups also witnessed a fall as the biggest fall was seen in vegetable prices. Prices fell 1.45 per cent as compared to a rise of 8.59 per cent in September. The core CPI inflation was flat at 5.9 per cent in October.

Future prediction
For this week, HSBC Manufacturing PMI and House Price Index will be the data to watch. GDP data, balance of trade, Market manufacturing PMI flash and Bank of Japan’s interest rate decision can be watched.

In the Euro zone, the major triggers are balance of trade, current account, market manufacturing PMI, market services PMI and consumer confidence.

For the US markets, Industrial production, manufacturing production, PPI, inflation rate, core inflation, existing home sales and market manufacturing PMI flash are important data.

Counters like Tata Steel, Sesa Sterlite, Hindalco, Jindal Steel were in demand on Friday, ahead of the coal block auctions, these stocks may move up, further.

Pharma stocks like Sun Pharma, Ranbaxy and Cipla may remain weak in the beginning of this week, but can recover by Wednesday or Thursday.

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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