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Positive week for global markets 
(Sat, 8 Dec RoundUp) 
The week gone by was a positive one for the global markets. Gains were seen across markets, with China's benchmark index leading the pack of gainers. Gains in the dragon nation were largely due to the hopes of more government support towards growing the economy. As for the rest of the regions, positive sentiments were spilled over from the stronger than expected nonfarm payroll report of the US. As per reports, the data indicated that 146,000 jobs were added to the economy in November, a figure much higher than what was expected by economists. The unemployment rate is believed to have dropped to 7.7% as compared to the expectations of a status quo figure of 7.9%. The Indian stock markets were amongst the lowest gainers this week, with the BSE-Sensex up by 0.4% for the week ended December 07, 2012.

Source: Yahoo Finance


Barring socks from the information technology space, all sectoral indices reported weekly gains. Amongst the top performers were those from the realty, oil & gas and metal spaces. Midcap and small cap stocks outperformed the largecaps this week, as the BSE Mid Cap and BSE Small Cap indices were higher by about 2.4% and 2.3% respectively.

Source: BSE

Now let us have a look at few corporate events that unfolded during the week. Being the first week of December 2012, auto manufacturers announced their sales figures for the month of November 2012 this week. Auto major, Mahindra and Mahindra reported an 18% increase in volumes. Sales of utility vehicles and SUVs (sports utility vehicles) stood at 48,143 units in November 2012 as compared to 40,722 units during corresponding month last year. The company's domestic sales volumes rose by 23% YoY (about 97% of total month sales) during the month, while passenger vehicles - which include UVs and Verito - sales increased at a faster pace of 38% YoY.

Two-wheeler major Bajaj Auto's sales volumes declined by 1% YoY. Sales of motorcycles declined to 326,727 units (about 88% of total volumes) during the month, a figure lower by 2% YoY. However, sales of its commercial vehicles rose by 7% to 45,566 units. The company's exports dropped by 4% YoY during the year till date, volumes dropped by 4% YoY to 2,911,974 units. Motorcycle sales volumes during this period were lower by 3% YoY.

The leader of the passenger vehicle segment, Maruti Suzuki reported a 12.4% increase in volumes for the month, with its domestic sales growing by 9.6% to 90,882 units. The company's exports were up by 38.3% YoY. During the week gone by, the company also announced a price increase of its vehicles across all models by up to Rs 20,000 from January 2013. This rationale for the same is the pressure on its margins due to currency fluctuation. During the July-September 2012 period, adverse foreign exchange movement had an overall impact of Rs 3.5 bn on the company.

Moving on to news of a FMCG company - UK-based GlaxoSmithKline Plc announced that it is set to acquire 31.8% stake in its Indian subsidiary GSK Consumer Healthcare. The open offer will commence on January 17, 2013 and end on January 30, 2013. The UK-based parent firm would buy the shares of the Indian consumer healthcare business at Rs 3,900 per share. The stock ended the week at a price of about Rs 3,760.

A leading business daily has reported that real estate major, DLF is looking at selling its wind energy business ahead of the recently reported Aman Resorts deal. As per the company, both the deals would help the company fetch a between Rs 25 to Rs 30 bn. It was earlier reported that the Aman deal would bring in a sum of Rs 18 bn into the company, thereby valuing its wind energy business at about Rs 7 bn to Rs 12 bn.

Movers and shakers during the week
Company30-Nov-127-Dec-12Change52-wk High/Low
Top gainers during the week (BSE-A Group)
Moser-Baer India5859.1%27 / 5
Koutons Retail81027.4%26 / 6
Jaiprakash Power394617.6%50 / 25
Pantaloon21024315.4%252 / 125
Jubilant Life Sciences21023813.5%247 / 154
Top losers during the week (BSE-A Group)
HCL Technologies655614-6.2%659 / 374
Infosys2,4372,320-4.8%2,990 / 2,102
Opto Circuits108103-4.5%225 / 97
Balrampur Chini6461-4.5%75 / 33
Suzlon Energy2019-4.3%37 / 15
Source: Equitymaster

The recent nod accorded by the Parliament to foreign direct investment in multi-brand retail is a positive sign. This development is expected to send positive signals to foreign investors, thereby boosting overall investments, and therefore India's economic growth. But if a certain business daily's article is to be believed, then it seems that foreign retail chains are still not ready to discuss their India foray plans. This is because the amendment to the Foreign Exchange Management Act (FEMA) is yet to be achieved. The same has to be passed by the Rajya Sabha.

Moving on to news in the telecom space, it is believed that the government has slashed the reserve prices of spectrum in the 1800 MHz band in four key circles by about 30%. This development is after the muted response in the auction from telecom players in which the government received bids of Rs 90.5 bn as compared to its expected minimum target of Rs 280 bn. These four circles include circles which did not receive any bid - Delhi, Mumbai, Karnataka and Rajasthan - on account of high reserve prices. The government had fixed a reserve price of Rs140 bn per 5MHz of spectrum. Coming down to each circle, the reserve price in Delhi was set at over Rs 6.9 bn, while those for Mumbai, Karnataka and Rajasthan were fixed at Rs 6.78 bn, Rs 3.3 bn and Rs 0.67 bn respectively.
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