Last week witnessed the markets ending on a flat note as the Sensex and Nifty closed marginally higher at 1.12 per cent and 0.9 per cent respectively. M&M and ITC remained the gainers in the large cap section with change of 6.55 per cent and 4.57 per cent respectively and the NTPC and BHEL remained the losers with a change of 4.09 per cent and 2.26 per cent respectively.
As disinvestment plans are not working too well, the Government is planning to offer discounts on proposed public sector exchange traded fund units. According to the ministry, investors will get an initial discount of 5 per cent at the time of purchase and also another 5 per cent as loyalty bonus, to those who make fresh investments after investing in the fund for at least a year. Also, there may be some sale in Government stocks. These include NTPC where the government is planning to offload around 9.5 per cent stake and Hind Copper where the government is planning to sell 4 per cent stake. The government has decided to offload stake in the Hind Copper through auction route on Friday 22, November 2012 with a 41 per cent discount to the closing price of Thursday.
The winter session of Parliament began on Thursday, November 22, 2012 and is scheduled to be on till December 20, 2012. The session includes 25 bills for consideration and passing and 10 bills for introduction, which includes Insurance bill, seeking to raise FDI limit from 26 per cent to 49 per cent, Companies bill and Pension Fund Regulatory and Development Authority bill. The company L&T Finance holdings Ltd, recently came out with its second quarter earnings for the year which rose 19 per cent on year on year basis to Rs 145 crore backed by loan growth and improved asset quality. The consolidated income also grew by 29 per cent to Rs 935 crore from Rs 725 crore during the same period. Also, the company may benefit from the new banking license issuing proposal. Short-term buyers can invest in the company with a target price of Rs. 88. The stock has strong support at Rs 72 and Rs 69.
The concluding day of last week witnessed cabinet approval to the National Pharmaceutical Pricing policy. According to new recommendations of the Ministers, the cabinet has imposed a cap on prices of 348 essential medicines, at the arithmetic average of prices of all drugs in a particular segment, with more than 1 per cent market share. In order to boost lending capacity and to maintain the capital base, the government is likely to soon finalise Rs 15,000 crore capital infusion for public sector banks. Rights issues is also considering for the recapitalisation of banks. The Finance Minister said that a budget provision of Rs 1,500 crore for the current fiscal has been made the Government.
On the global front, the rating agency Moody's downgraded France's sovereign rating to AA1 from AAA. The Euro zone finance ministers in the week failed to meet a consensus in providing aid for debt ridden Greece and are hoping to reach a deal in the coming week. Also the Chinese PMI data stood at 50.4 in November as compared to 49.5 in October.
Gold is looking very strong support at $1718 and $1705. The immediate resistance for gold is at $1748 and $1759. Crude may remain subdued for some time after the ceasefire between Palestine and Israel. The US inventory data is supporting the minor uptrend and it may test $88.60 and $90. The commodity has support at $86.42. The major stocks are looking weak, especially Reliance, Tata Steel, L&T, ICICI Bank and SBI. The counters, which may lift the market upwards, are M&M, Maruti, HDFC Bank and HDFC.
Spot Nifty has support at 5593 and 5549. The immediate resistance for the Nifty lies at 5655. This week for Indian markets, the major trigger to be watched will be the second quarter GDP data, which is likely to announced on November 30, 2012.
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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