• JUNE 6, 2009

13th successive weekly gain

The Indian markets put up another positive performance during the week ending June 5 2009. It may be noted that the Indian markets have had a positive run for thirteen weeks now. The country's benchmark index, the BSE-Sensex ended higher by 3% over the previous week. Markets across the world put up a good performance as well. In Asia, the pack was led by China (up 5%), Singapore (up 3%), Hong Kong (up 3%) and Japan (up 3%). As for other global markets, the pack was led by US (up 3%), followed by Germany (up 3%), France (up 2%), UK (up 1%) and Germany (up 0.3%).

Coming to the performance of sectoral indices in India, stocks forming part of the consumer durables, capital goods and metal sectors led the pack of gainers. The BSE-Capital Goods and BSE-Metal indices recorded gains of about 8% each. On the other hand, stocks forming part of the oil and gas and banking spaces recorded weekly losses. The BSE-Oil and Gas and BSE-Bankex indices recorded losses of about 1% each. Further, the BSE Small cap Index put up another strong performance during the week, recording gains of nearly 8%, while BSE Midcap Index gained by nearly 7%.

Data stating the institutional activity shows that there was strong buying activity recorded by both FIIs (foreign institutional investors) and domestic mutual funds during the week gone by. However, the domestic mutual funds seemed to be on a shopping spree as they invested nearly Rs 47 bn during the week barring Friday (data for Friday was not available at the time of writing), while FIIs invested nearly Rs 20 bn.

Coming to the performance of India Inc., some of the heavyweights which announced their results during the week were Nalco and Sun Pharma. Nalco recorded a net sales growth of around 1.9% YoY led by higher sales of alumina and electricity. However, its operating profits declined by 22% YoY mainly on account of higher power & fuel costs and staff expenses during the fiscal. On the bottomline front, the numbers were lower by 22% YoY. Bottomline for the fourth quarter plunged 81.4% YoY on the back of a 6.2% fall in topline. As for Sun Pharma, it recorded a net sales growth of 27% YoY during the fiscal led by its domestic formulations and export bulk businesses. Its operating margins contracted by 2.6% YoY to 43.6% on account of rise in staff costs and other expenditure (as percentage of sales). Net profits for the year grew by 22% YoY

Being the first week of June, auto sales numbers for the month of May 2009 were released during the week. First for the two-wheeler segment - Hero Honda witnessed another strong month wherein it recorded a 23% YoY increase in volumes as compared to last year. On the other hand, its peer group company TVS Motors announced a 5% YoY rise in vehicle sales during the month. This rise in volumes was aided by higher domestic motorcycle sales and moped sales. Bajaj Auto reported an 8% YoY drop in overall motorcycle volumes as compared to May 2008. In fact Bajaj Auto's exports, which grew by nearly 25% YoY for FY09, witnessed a 3% YoY drop in volumes during the month of May. As for the four-wheeler segment, Maruti Suzuki announced a 16% YoY growth in volumes during the month of May 2009. This was largely aided by higher export sales, which grew by 87% YoY, while its domestic sales grew by 10% YoY.

Source: Yahoo FinanceSource: Yahoo Finance

Source: BSESource: BSE

Movers and shakers during the week
Company 29-May-095-Jun-09Change52-wk High/LowChange from 52-wk High
Top gainers during the week (BSE-A Group)
Gujarat NRE Coke 43 60 39.4%117 / 17 -49.1%
Aban Offshore 905 1,241 37.1% 3,814 / 224 -67.5%
Jaiprakash Hydro70 96 37.1%93 / 23 3.4%
Tech Mahindra474 637 34.4%859 / 204 -25.9%
Suzlon 98 131 34.1% 275 / 33 -52.4%
Top losers during the week (BSE-A Group)
Indiabulls Fin. Serv. 217 194 -10.6%370 / 78 -47.7%
NMDC449 418 -7.0% 463 / 115 -9.8%
Indiabulls Real Est.246 232 -6.0%425 / 82-45.5%
Axis Bank783 738 -5.9%821 / 279-10.2%
Sesa Goa 166 157 -5.3%193 / 60 -18.5%
Source: Equitymaster

Inflation (as measured by the WPI) declined to 0.48% for the week ended May 23. During the previous week, the number stood at 0.61%. The fall in the numbers is in spite of prices of food items such as fruits, tea, pulses, amongst others, increasing on a week on week basis. It may be noted that this is the twelfth consecutive week when inflation stood below 1%. The inflation figure stood at 8.9% during the corresponding week a year ago.

As for economic news, improved production levels have raised India's infrastructure sector output by 4.3% YoY for the month of April as compared to the same month last year. Growth in production levels in core sectors such as cement, finished steel, coal and electricity, was 2.7% in the same month last year and 5.9% in the year before. However, crude oil production remained in the negative as it fell by 3.1% YoY.

Export numbers for the month of April 2009 were announced during the week as well. Exports fell by nearly one-third as compared to the same month last year. It may be noted that exports have now fallen for nearly 7 months in a row. During the month of April 2009, the figure stood at US$ 10.7 bn as compared to US$ 16.1 bn last year. During FY09, exports grew by a mere 3.4% to almost US$ 169 bn. On the other hand, the slowdown in domestic markets has also lowered imports by nearly 36% YoY during the same period. Imports on the other hand have dropped mainly on account of a 58% YoY reduction in oil import.

As for international news, the US government reported the unemployment numbers for the month of May 2009 yesterday. During the month, employers cut nearly 345,000 jobs from their payrolls. The US markets yesterday welcomed this piece of news as expectations floated around levels of 520,000 job losses. During the earlier month, the figure stood at 504,000 (revised). However, according to a separate survey, the unemployment rate rose to 9.4%, a 26-year high, from 8.9% in April.

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