Indian Stock Market Updates

July 27, 2008 - PRLog -- WEEKLY MARKET OUTLOOK

THE WEEK THAT WAS
Trading for the week started on an upbeat note. Markets galloped after the Congress-led coalition government won a confidence vote in parliament late on Tuesday, 22 July 2008, raising hopes for economic reforms. The 30-share BSE Sensex surged 838.08 points or 5.94% at 14,942.28 and the broader based S&P CNX Nifty advanced 236.70 points or 5.58% at 4476.80, on that day. However the market snapped its five-day rally and sink deep in red on the back of continued profit booking and weak global cues followed by the week sentiment of seven blasts that took place in Bangalore. Markets ignored stability in crude price and steady inflation numbers. The BSE bank, oil & gas, realty and capital goods stocks witness heavy selling pressure. Power, metal, auto and IT indices were also closed negative. More pressure was seen from domestic financial institution and life insurance companies.

Reliance Industries reported 13.2% growth in net profit to Rs 4110 crore on 40.65% increase in total income to Rs 41,805 crore in Q1 June 2008 over Q1 June 2007.

Reliance Communication galloped 15.60% to Rs 503.10 after it called off tie-up talks with South Africa's MTN Group, Africa's biggest mobile phone group, citing legal issues.

India’s largest listed cellular services provider by sales Bharti Airtel reported 44.86% growth in net profit to Rs 2046.79 crore on a 39.72% increase in revenue to Rs 7952.32 crore in Q1 June 2008 over Q1 June 2007.

Banking shares advanced in anticipation of reforms in the banking sector after the UPA government won trust vote in parliament. The Union cabinet approved the merger of unlisted State Bank of Saurashtra with its parent State Bank of India (SBI) on Thursday, 24 July 2008.

Ranbaxy Laboratories said a UK court had quashed the country's Serious Fraud Office's (SFO) prosecution of the firm's subsidiary. Ranbaxy said in a statement the English Crown Court had also declined an application by the SFO for permission to appeal to the English Court of Appeal.

Shares of firms which are potential beneficiaries of the Indo-US nuclear deal surged after the Indian government won parliamentary vote of confidence clearing the way for the landmark civilian nuclear deal with the US. They are- Reliance Infrastructure, Alstom Projects, Rolta India, Walchandnagar Industries, Areva T&D, Larsen & Toubro, NTPC all surged during the week.

Inflation based on the wholesale price index rose 11.89% in 12 months to 12 July 2008, below the previous week's annual rise of 11.91%, government data released on 24 July 2008 showed. Inflation for the week ended 17 May 2008 was revised upwards to 8.66% from 8.10%.

THE WEEK AHEAD
Volatility will rule the the bourses next week. The Reserve Bank of India (RBI)’s monetary policy review, futures & options expiry for July 2008 series, progress of monsoon, and results of key index pivotals will dictate the trend.

Soaring inflation which is hovering near 13-year high has been a key concern for the financial markets. The Reserve Bank of India (RBI) is set to review the monetary policy on 29 July 2008. RBI may further hike short-term interest rates or the repo rate as well as statutory deposit requirements or the cash reserve ratio (CRR).

The progress of the monsoon will also be watched very closely, as it will influence the GDP figures. Monsoon rains were 33% below average in third week of July 2008, according to Indian Meteorological Department. Scant rainfall is bad news for the government, which is battling runaway inflation, which has surged to a 13-year high, largely due to a sharp rise in commodity prices.

There are expectations that the government may push forward some economic reforms which had been stalled over the past four years due to opposition from Left parties, after it won trust vote in parliament on Tuesday, 22 July 2008. Left parities had stalled privatisation of state-run firms, pension reforms, higher foreign limits in insurance and more liberal norms for foreign bank.

A sharp cooling off crude oil which touched record high of $147 per barrel early this month augurs well for the Indian economy. It is currently hovering at about $126 a barrel. Any sharp rebound in oil prices would dampen the sentiment.

Market experts however feel that the market is still cautious and there is a lot of cash on the sidelines. He believes the markets have already tested their bottom last month however, he said that a full-scale bull market is unlikely.

For market updates, stock screeners, stock analysis of indian stock market logon to http://www.thestockworld.com