The markets showed a decline of 0.4 per cent each in a week on week basis trade. The BSE Capital Goods and Auto sector was up around 2.3 per cent and 0.2 per cent in the weekly trade where as the BSE realty sector (down around 2.5 per cent) and metals sector (down around 1.5 per cent) remained the losers. Nifty has support at 5626 and 5600, below these levels can cause more selling but the chances are unlikely. Resistance for the Nifty lies at 5765.
L&T came out with its quarterly numbers last week, showing a rise of 42.45 per cent in the net profit to Rs 11.37 billion for the quarter ended September 30, 2012 against Rs 7.98 billion in the same period last year. Total revenues also grew 17.35 per cent to Rs 131.95 billion from Rs 112.44 billion in the same quarter last year. The sales rise 17.18 per cent to Rs 133.28 billion for the quarter ended September 30, 2012 from Rs 113.74 billion in the year ago period. Yes Bank also reported a 30 per cent rise in the net profit year on year for the quarter ended September 2012 to Rs 306 crore from Rs 235 crore. Also, the net interest income rose 36 per cent to Rs 524 crore from Rs 385 crore a year ago.
On Friday, ICICI Bank posted a 30 per cent increase in net profit supported by strong growth and higher fee-based income. The bank came out with its highest ever quarterly profit where the net profit for the quarter ended September stood at Rs 19.56 billion rupees against Rs 15.03 billion rupees a year ago. Net interest income also rose 35 pet cent to Rs 33.71 billion rupees.
Also companies like TCS, AXIS Bank, M&M and HCL Tech came with excellent quarterly numbers and these stocks can move up further in the coming days, price declines can be utilised to enter at lower levels. In the mid-cap space Orient Bank of Commerce, Yes Bank, Indusind Bank, Unichem Lab, Trend etc came with a moderately good set of numbers. Price corrections can be utilised to buy these stocks.
The Finance Minister, P Chidambaram said the country needs more stimulus packages in order to promote growth and to contain fiscal deficit to overcome the difficult economic situation. He also expects to make the fiscal deficit at 5.3 per cent of GDP this year and further, improve it to 3 per cent by 2016-17 by coming out with new plans to support economic growth.
The Government is also looking to boost investment by reducing its withholding tax on the rupee - denominated infrastructure bonds from 20 per cent to 5 per cent for the bonds issued from July 1, 2012 to June 30, 2015. RBI is also working to redefine the SLR for the purpose of calculating liquidity under Basel II regulatory norms to avoid banks default.
International gold is weak and it is likely to test $1695- $1665 levels. The commodity is likely to remain under pressure till the US Presidential election is over. Resistance for gold is at $1705 and $ 1728. Globally, all the markets were trading cautiously. Chinese manufacturing PMI is the major data to watch out.
Now, the major trigger for the Indian markets is the RBI policy meet, which is on October 30, 2012. Also corporate earnings will be closely watched. The major results for the week include Union Bank, Sobha Developers, VGuard, ABAN and BHEL.
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 firstname.lastname@example.org. 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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