Pressure mounts

Oct 20, 2014, 08:17 IST | Alex K Mathews

Nifty has been affected by global cues, which have been weak for the past few days

In the last week, we saw markets under pressure on the back of weak global cues. Foreign investors in seller mode added concerns. Nifty closed down around 1 per cent, on a weekly basis. Nifty has resistance at 7825 and 7858; a move well above these two levels can lift the Nifty towards 7900 and more. Support for the Nifty lies at 7742 below.

Rise and fall
Sintex Industries came out with stellar earnings in the week. Net profit of the company rose 47 per cent on a year on year basis. For the quarter that ended September 2014, the consolidated net profit stood at Rs 107 crore as compared to R 73 crore in the previous quarter.

For the July to September quarter, the net sales of the company was at Rs 1672.19 crore as compared to Rs 1359.64 crore in the same period, last year. The plastic business of the company reported a 20 per cent growth in revenues at Rs 1331 crore whereas the textiles business rose 31 per cent to Rs 173 crore on a yearly basis.

The IT firm, Cyient LTD posted a 24.4 per cent jump in the net profit for the September 2014 quarter on the back of growth across the segments. The net profit for the period under review stood at Rs 90.1 crore as compared to a net profit of Rs 72.5 crore, for the corresponding period last year.

Revenue rates
Revenue grew 22.4 per cent to Rs 672.39 crore from Rs 549.28 crore in the July to September 2013 quarter. Earnings during the quarter on quarter basis jumped to Rs 108.1 crore from Rs 87.7 crore.

For the April to September period of this fiscal, indirect tax collection rose by 5.8 per cent. The indirect tax collections, which comprises excise, customs and service tax stood at R 241811 crore for the period under review as compared to R 228619 crore in the corresponding period a year ago.

For the same period, the excise collection fell marginally by 0.6 per cent to over Rs 75021 crore. Customs collections rose 5.5 per cent to over R 89324 crore during the April to September period as compared to R 84643 crore in the same period a year ago and the service tax collection grew by 13.1 per cent to Rs 77466 crore during the same period.

Retail inflation
Retail inflation for September fell to its all time low, led by lower food prices and fuel costs. September CPI stood at 6.46 per cent and the August CPI inflation has been revised to 7.73 per cent from 7.8 per cent.

Food inflation also trimmed down to 7.67 per cent against 9.42 per cent on a monthly basis. The vegetable price inflation lowered to 8.59 per cent against 15.15 per cent in August.

For September, the country’s exports grew marginally by 2.73 per cent but a surge in the gold imports took the trade deficit to a 18 months high of $ 14.2 billion. But the imports rose by about 26 per cent which is the highest increase in the last 3.5 years, to $ 43.15 billion in September 2014.

Gold imports in the month under review increased to $ 3.75 billion compared to $ 682.5 million in same month last year. India’s exports stood at $ 28.9 billion in September, while the trade deficit in September 2013, was at $ 6.12 billion.

World stage
On the global front, the markets were grabbed by global economic growth concerns. But a reverse in the market movements was seen on the back of strong economic data from the US; the jobless claims fell to their lowest level in 14 years. Also, hope of more stimulus measures from the policy makers supported the markets.

In the coming week, for Indian markets, the major watch list may be earnings of companies. The major ones in the list includes IDEA, Navin Fluro, Geometric, INOX Leisure, McDowell, Alembic pharma, KRBL, CAIRN, Tata Coffee, HDFC Bank, Zensar Tech, Blue Star, DHFL, UPL, JSW Steel, Biocon, PNB, Asian Paint, Havells, Mastek, M&M finance, KSB Pumps, Kotak Bank, HDFC, Wipro and L&T Finance.

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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