Through thick and thin
Despite mixed global signals, earnings and buying supported the market
The better than expected earnings and positive FIIs buying this week, supported the markets, despite mixed global cues. Nifty closed at 6144, with a weekly loss of 1.1 per cent. Nifty outlook is weak and it is likely to test 6080. If it trades below this then more sell-off can be expected, and we can expect a level of 5950-plus. Resistance for the Nifty lies at 6175 and 6229.
On the stocks front, the gainers were LT and GAIL, closed up around 8 per cent and 4.7 per cent respectively. Losers were BHEL and Jindal Steel closed down around 7 per cent and 6.8 per cent respectively. Textile major Raymond came out with its earnings, showing a rise of 84 per cent on the back of rise in profits in the company’s textile business company. The net profit for the quarter ended September stood at Rs 92 crore as compared to Rs 50 crore in the same period last year. The net sales also rose by 10 per cent to Rs 1224 crore in the same quarter from Rs 1114 crore in the last fiscal. The textile business of the company saw a rise of 18 per cent in the net profit at Rs 126 crore and revenue was at Rs 559 crore, showing growth of 7 per cent.
FMCG Company Emami LTD reported a 35.09 per cent rise in the net profit for the July-September quarter. The net profit of the company stood at R 79.95 crore for the second quarter as compared to Rs 59.18 crore in the same period last year on the back of improved margins. The net sales of the company for the quarter under review, stood at Rs 406.74 crore, against Rs 360.66 crore in the corresponding period last year, showing an increase of 12.77 per cent. In the first six months of the year the company reported net profit of Rs 140.62 crore as against net profit of Rs 105.79 in the corresponding period in the previous year.
Last week remained positive for the public sector banks as the government has finalized to infuse capital of R 14000 crore. The finance ministry also said the banks can raise other Rs 10,000 crore through right issue, follow-on public and qualified institutional placement, depending on their requirement. The biggest gainers for the infusion was SBI as the bank will get Rs 2000 crore as the capital infusion and also the bank can raise from the market up to 38 per cent as the government has a stake of 62 per cent in the bank.
In the global front, the US markets remained positive as of short term rising of the borrowing limit. The jobless claims data, which was the first one to be announced after reopening of the US government, was a disappointing one. Markets reacted positively to the data, but corporate earnings remained mixed which made the markets to remain sideways in the week.
Gold is strong and likely to test $1348 and $1365 in the near term. Gold has support $1315 and $1302. Investors can buy Put options of the stocks like Hindalco, LT and Sun pharma in the coming week. 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 email@example.com. Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).