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Market Eye
| Week ahead: Market to see stock specific action | 27/09/2009 06:33:48 | With the reporting season about to start and many companies lining up to tap the market for funds, investors are likely to tread a cautious path in the coming week, which will be a pretty short one as the market will remain closed on Monday and Friday for Dasara and Gandhi Jayanti respectively.
During the week ended September 25, the market saw a few weak spells, due largely to some profit taking after recent strong gains and on fears some governments may soon scale down stimulus measures to an extent.
Despite vaulting to their 16-month highs, the Sensex and Nifty were seen struggling for a better part of the week, as investors remained wary of building up positions ahead of a long weekend and a truncated week.
Robust excise duty collection in August and higher advance tax payments made by India Inc have raised expectations of some impressive report cards. State Bank of India paid an advance tax of Rs 1,832 crore in the September 2009 installment, up more than 17% over a tax of Rs 1,560 crore it had paid in same period last year. Bharti Airtel and Infosys Technologies paid 220% and 100% more than what they had paid in the second installment for the previous year. Reliance Industries and Maruti Suzuki have also made higher payments this time.
With several corporate houses mobilising funds through private placements to institutional investors to fund expansion, and in some cases to prepay debts, there are some concerns about near term liquidity. Added to this, a number of companies are waiting to tap the market through initial public offerings over the next couple of quarters.
Foreign institutional investors, who had pulled out of the market last year, have been pumping in funds quite relentlessly in the current calendar year. FIIs are net buyers to the tune of Rs 12,700 crore (approximately) in the current month (till September 23). In all, FIIs have so far bought shares worth a net Rs 52,891 crore in 2009.
Meanwhile, with global economy slowly getting back on track, some governments are reportedly considering scaling down some stimulus measures to an extent.
Back home, the annual rate of inflation, calculated on point-to-point basis, stood at 0.37% for the week ended September 12, 2009, compared with 0.12% for the previous week and 12.42 per cent during the corresponding week of the previous year. Despite inflation emerging into the positive zone, it is highly unlikely that the Apex bank will consider hiking key bank rates in the near future. | Market
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