Despite reports of a pro-industry budget and the markets gaining in three out of five sessions, key indices ended the week in the red on institutional selling and weak global cues. While the Sensex was down 123.38 points or 1.31 per cent to 9,300.86 for the week, the Nifty lost 31.70 points or 1.10 per cent to 2,843.10.
While reports of tax relief and fiscal stimulus in the forthcoming budget was considered a positive by the markets, poor corporate results, a fall in direct tax collection and lower exports were the dampeners.
What to expect this week
Another round of measures to stimulate the economy is likely to keep the markets steady. The market is betting on the central bank cutting rates. It is also expecting tax breaks and sector-specific sops in the budget. Investors will keep an eye out for the index of industrial production (IIP) data for December 2008 which will be released on February 11, 2009.
The IIP for November 2008 stood at 2.4 per cent, compared to contraction of 0.4 per cent in October 2008. Markets will also watch out for Obama's plan to revitalise the financial sector.
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| STOCK TO WATCH SESA GOA Last week's close (Rs) 98.80 Prev. week's close (Rs) 84.85 Week's high (Rs) 100.75 Week's low (Rs) 77.63 Last week's ave. daily turnover (Rs cr) 83.27 Prev. week's ave. daily turnover (Rs cr) 72.69 Number of up/down move 4/1 The share prices of Sesa Goa rebounded with weekly gains of 16.64 per cent. A revival in Chinese imports for iron ore and recovery in the domestic iron ore prices could be good news for the company. |
The company generates about 93 per cent of its revenue from exports, including 65 per cent to China. India's export of iron ore grew by a mere five per cent in first nine months ending December but by the end of January 2009, exports rebounded by a whopping 38.4 per cent.
Also, domestic iron ore prices have recovered by about $4-5 per tonne in the last one month to $70-72 on account of higher Chinese demand. The stock is currently trading 55 per cent lower than its 52-week high of Rs 219 per share.