Chiddu's phoren flavour

The markets had a good week and closed at new 52week highs The markets had its jitters and after the inflation numbers were released and the possibility of rate cut in the January 29 2012 RBI meeting receding markets fell sharply It was only after the announcement of diesel price hike and moves towards deregulation of diesel prices that market mood turned bullish and the sentiment positive Union Finance Minister P Chidambaram will meet foreign investors in Singapore and Hong Kong in a twoday trip starting today before flying to Europe to meet investors in London and Frankfurt File pic The BSESENSEX gained 37540 points or 191 per cent to close at 2003904 points while the NIFTY gained 11310 points or 190 per cent to close at 606440 points The broader indices like the BSE500 and BSE200 and BSE100 gained 134 per cent 153 per cent and 172 per cent respectively The BSEMIDCAP was almost flat gaining a mere 012 per cent while the BSESMALLCAP lost 113 per cent Ups and downs The top gaining sectors were BSEOIL up 891 per cent BSEREALTY up 773 per cent and BSEPSU up 467 per cent The losers were BSEAUTO down 288 per cent while BSEMETAL lost 144 per cent The week saw plenty of action and the announcement of increase in diesel prices set the trigger for a smart rally in the prices of all the Oil Marketing Companies The top gainers included Indian Oil up 2295 per cent BPCL up 1693 per cent and Hind Petro up 1134 per cent ONGC another beneficiary of the diesel price hike because of a lower subsidy share was up 1558 per cent Other gainers were Reliance up 715 per cent Bharti Airtel up 738 per cent and NTPC up 767 per cent Losers included MampM down 584 per cent Wipro down 533 per cent McDowell 491 per cent and Jet Airways down 381 per cent Reliance Industries reported encouraging results on Friday and has been a sharp gainer for the week and also since the share buyback began one year ago The share gained Rs 122 or over 16 per cent from Rs 777 The company bought back shares worth Rs 3400 crore in the market buyback and the same has been highly beneficial to shareholders as the market cap has seen a sharp appreciation It may also be mentioned that the ceiling of the buyback was Rs 870 and the markets have now sustained this price With the positive news flow on account of results and the diesel deregulation the stock is likely to record further gains going forward as well Arshiya International the third party logistics player continued to be at the receiving end and has been locked at lower circuit for eight consecutive days The share has lost over 72 per cent in value in this time period and closed at just about Rs 49 against Rs 122 when the price fall began The company is highly leveraged and has longterm debt of Rs 2250 crore A conference call held for investors and analysts did not help the company in removing doubts about the companyrsquos performance The selling on the counter particularly the sellers at circuit filter is scary and is unlikely to abate shortly Govtrsquos big plans The Finance Minister FM would be on the road during this week meeting FIIs in Singapore Hong Kong London and Frankfurt FIIs have been big buyers last year and have become the mainstay of the Indian markets With almost Rs 5000 crore invested this week it would be crucial to see the message given to these investors The Indian Rupee appreciated 181 per cent to close at 5371 Domestic institutions continued to be sellers during the week and sold shares worth Rs 1550 crore IRFCL Indian Railway Finance Corporation Ltd is tapping the markets with its tax free bond issue in two tenures of 10 and 15 years This offers an attractive investment opportunity for taxable income investors in the retail category at 768 per cent and 784 per cent for the two tenures The definition of retail investors is investment of upto Rs 10 lakh The week ahead This week will have two major drivers The first would be comments by the FM on his road show where he would assure investors of reforms on the fiscal front and containment of subsidies so that there is no downgrade of our sovereign rating The second would be the results of the performance for the Octoberndash December quarter The timing of the diesel price change close on the heels of the railway passenger fare hike indicates the resolve of the FM to ensure big inflows from FIIs in the markets So far they have invested over R13500 crore in the market in the short period of 18 days Against this backdrop it makes sense to play the markets on a bullish note especially with the RBI review meeting outcome not clear on whether rates would be cut or not The markets are likely to rally in the coming week and one needs to be bullish The BSESENSEX has support at 19977 points then at 19841 points then at 19715 points and finally at 19561 points It has resistance at 20113 points then at 20214 points then at 20318 points and finally at 20445 points The NSENIFTY has support at 6047 points then at 6012 points then at 5989 points and finally at 5935 points It has resistance at 6082 points then at 6117 points then at 6181 points and finally at 6232 points Arun Kejriwal is founder of the Mumbaibased advisory firm Kejriwal Research amp Investment Services Pvt Ltd Readers are invited to read more about these and other issues on his website httpak57in Disclaimer No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities or as advice to do so in any way whatsoever All matter published here is for educational and information purposes only and under no circumstances should be used for actual trading or making investment decisions Readers must consult a qualified financial advisor prior to making any actual investment or trading decisions based on information published here Any reader taking decisions based on any information published here does so entirely at his or her risk u00a0