Indian Markets: Strong End to a Volatile Week

Markets ended the day comfortably in positive territory. The pack of gainers was led by stocks from the metal and energy sectors. The overall market breadth was positive with gainers outnumbering losers by a ratio of 1.7 to 1 on the BSE. On the global front, the Asian indices closed mixed, while the European indices have opened mostly negative.

The BSE Sensex closed 807 points higher, while the NSE Nifty closed higher by 208 points. The BSE Midcap and Smallcap indices closed in the red, down by 3.8% and 2.9% respectively. The rupee was trading at 49.45 to the dollar.

Rise in  US stocks yesterday, coupled with a lower inflation rate for the week ended October 18, led to a firm opening on the domestic bourses. However, volatility was witnessed in the sessions from then onwards, as the markets saw alternate bouts of buying and selling. Despite the indices paring some gains towards the afternoon session, they managed to close well above the dotted line after a sudden buying spree towards closing. While M&M (up 25%) and Reliance Communication (up 17%) emerged as gainers on the BSE Sensex today, Ranbaxy (down 2%) and TCS (down 1%) led the pack of losers.

As per a leading business daily, sales of two wheelers in Delhi, Mumbai and Pune have dropped by a sharp 30% to 50% during the festival period between Dhanteras and Diwali this year when compared to the same period last year. In most parts of the country, dealers are accustomed to receiving almost 15% of their annual sales during the auspicious festival of Diwali.

But this year things were very different due to the ongoing liquidity crunch, the spike in interest rates and a difficulty in finding financing due to rising defaults. While the stock of Hero Honda ended the day lower by 2%, Bajaj Auto and TVS ended the day higher by 3% and 1% respectively.

GAIL and IOC have inked a Memorandum of Understanding (MOU) for cooperation in the area of petrochemicals. This will include collaborating for exploring the possibility of setting up of a cracker complex, which will include downstream derivatives, at Barauni (Bihar). As per a leading business daily, this project is estimated to approximately cost Rs 100 bn. This unit is likely to be constructed within a period of five years.

The equity structure of this venture is yet to be decided. As per the management of GAIL, it may also look to induct a private player in this venture. The petrochemicals segment provides good support to the company's overall growth and profitability. For example, in FY08, the segment contributed 14% to the topline but 31% to the gross margins. Hence, the company is partnering with other companies for larger presence. The stock of GAIL ended the day higher by 3% while IOC ended lower by 3%.

Comments

[stocks:]

I start to interested in Indian market

2008 Oct 31 11:04 AM