Markets at a glance

The bulls were on a roll last week, cashing on all the goodies by the policy makers and shrugging off any negative newsflow, whatsoever. By the end of the week, the Sensex had risen 724 points (8.1 per cent) to close at 9,690, while the Nifty increased by 207 points (7.6 per cent) to end at 2,921.

The markets had a buoyant start to the week, after the government unveiled a $4 billion package and RBI slashed interest rates by 100 basis points over the preceding weekend. Inflation was down to 8 per cent compared to 8.4 per cent, the week earlier.

And, despite dismal IIP numbers and failure of the plan to rescue US auto makers on Friday, the markets ended the day in green, thereby displaying both resilience and a strong upward momentum.

What to expect this week

Looking at the strength displayed by the markets last week and particularly on Friday vis-à-vis its Asian peers, in all likelihood this bear market rally is not over yet. And with the second fiscal stimulus to be announced by the government anytime during this week, traders expect the market to tread higher from current levels.

FIIs have bought India equities (stocks and derivatives) worth Rs 4,970 crore in December (till December 11), which has further improved market sentiments. But the failure of the auto bailout plan has led to a rise in risk aversion globally all over again and the Indian markets may not stay buoyant for long. The fall of large US auto makers could spark another round of a global selloffs.

 

Stock to watch
ELECON ENGG
Last week's close (Rs) 35.50 Prev. week's close (Rs) 29.93 Week's high (Rs) 35.82 Week's low (Rs) 29.90 Last week's ave. daily turnover (Rs cr) 1.06 Prev. week's ave. daily turnover (Rs cr) 0.88 Number of up/down move 4/0

Shares of Elecon Engineering Company could see action on the bourses after the company was awarded an Rs 120 crore order from Mundra Port and Special Economic Zone for the design, supply, erection, testing and commissioning of material handling system for west port, Mundra.

The new order accounts for 13 per cent of FY08 sales of around Rs 950 crore. The stock delivered around 18 per cent returns in the last one week with the news that Prayas Engineering, a promoter company has purchased around 45,000 shares from the open market.

The stock is trading at 4.2 times its trailing EPS of Rs 7.22 with a dividend yield of 4.2 per cent. The stock has corrected around 90 per cent from its peak levels. The stock had delivery volumes of around 60 per cent on Friday.