Prime Minister Narendra Modi's emphasis on financial inclusion and 'make
in India' theme on the Independence Day and global cues will affect
markets this week.
It is this manufacturing hub which will
provide jobs, markets and improve the living standards of the masses. It
sure sends a message which is loud and clear and one is sure that
industry and the world will sit up and notice.
Markets saw the
Nifty make yet another life-time high while the Sensex did not; it's a
matter of time before it does. Economic indicators seem to suggest that
inflation is now coming under control.
Similarly, manufacturing
is undergoing a major revival and the investment climate and the
sentiment have improved. The Monsoon Session of Parliament has ended and
the Opposition did not allow the Insurance Bill to pass. Many more
Bills would be introduced in the Winter Session
.
The government
has a big unfinished agenda. The Prime Minister slated to visit the US
in September and one can be sure that both countries have a host of
issues to be discussed and finalised. Tata Motors, led by Jaguar Land
Rover (JLR), produced a brilliant set of numbers with the net profit
increasing from `1,726 crore to `5,398 crore for the quarter ended June.
A big contributor to this rise was increasing sales of JLR cars
in China, where the company's sales accounted for 28 per cent against 24
per cent in the yearago period. The scrip of Tata Motors gained to
close at 12 per cent higher. The Syndicate Bank case clearly shows that
political patronage was available to the players involved. In a mocking
statement to the financial community, the management of Bhushan Steel
(one of the companies involved in the Syndicate Bank scam) will seek
shareholders' approval to raise $1 billion from capital markets.
The
questions is who would be willing to invest in a company whose
vicechairman is behind bars, the share price has plunged to `160 from
`400-a fall of 60 per cent- and its promoter holding being invoked by
lenders. This drama unfolding is indicative of the damage that
over-leveraged companies bring unto themselves.
Foreign
institutional investors (FII) maintained their bullish stance and bought
equity worth `2,150 crore in the four trading days last week while
domestic institutions chipped in with purchases of `550 crore. The
result season is over and the most pleasant surprise is the stellar
performance by oil marketing companies.
They have all reported
profits for the quarter, which indicates that the under-recovery has
reduced substantially. With petrol at market prices and diesel almost
also at the same level, the shortfall is restricted to kerosene and LPG,
which is partly subsidised by the oil producing companies. This turn in
profits has a double benefit for the oil companies as they will be able
to repay the loans taken to fund losses.
The week ahead will be
largely driven by global news flow amid geopolitical concerns in Iraq
and Ukraine, and FII activity. There is no reason to believe that the
markets will stop their buoyant mood. Buy selectively.
No comments:
Post a Comment