Weekly review: Markets in choppy waters

The markets moved in a choppy fashion during the course of the week in the absence of any major news triggers and a lack of directional trend post the losses of the previous fortnight. The BSE benchmark traded in a range of a mere 390 points, touching a low of 18,779 and a high of 19,167 before eventually ending with gains of 147 points or 0.7% at 19,008 and the Nifty ended at 5697, up 42 points. Worthy of mention, the intra-week range was 908 points and 1,035 points in the preceding two weeks. The result candidates hogged the limelight in what was otherwise an uninspiring week.

There was some cheer on the inflation front. Food inflation moderated for the second straight week in January, tracking lower fruit and vegetable prices. The food price index rose 15.52% and the fuel price index climbed 11.53% in the week to January 8 as against 16.91% and 11.53% in the week-ago period. The decline in food inflation was mainly due to falling prices of pulses, wheat and potato. Finance Minister Pranab Mukherjee was, however, guarded in his response, saying that the dip in food inflation was not "much consolation" and the government would continue to take steps to tame the rising prices.

There was nothing heartening about the growth numbers, though. The IIP growth plunged to 2.7% in November 2010 as against 11.3% in the same period a year-ago and an expansion of 11.29% in october. The industrial growth during April-November of this fiscal stood at 9.5% as against 7.4% in the corresponding period last year. The Planning Commission Deputy Chairman Montek Singh Ahluwalia, however, exuded confidence that the economy would end the current fiscal with targeted GDP growth of over 8.5%.

Among the stocks in the news, the Anil Dhirubhai Ambani Group companies received a battering in after the SEBI issued an order over the previous weekend bannning group companies Reliance Power and Reliance Infrastructure from participating in the markets. Reliance Infrastructure slid by 7.6% at Rs 737 to emerge as the top loser on the BSE. RCom lost 1.6% at Rs 136, Reliance Capital fell 4.3% at Rs 586 and Reliance Power corrected by 3.5% at Rs 141. On the other hand, Tata Steel added 1.2% at Rs 629 as its FPO was fully subscribed, with most bids coming at the top end of the Rs 594-Rs 610 price band.

On the earnings front, TCS soared 8.3% to an all-time high of Rs 1,212 and topped the gainers list on the BSE after its consolidated net profit rose 9.24% to Rs 2,370 crore on the back of 4.05% growth in net sales to Rs 9,663 crore on q-o-q basis. The growth was led by the developed markets such as the United States and Europe, with strong contributions from Asia Pacific and Middle East and Africa.

Bajaj Auto raced ahead by 5.1% at Rs 5311 after reporting a 40.42% rise in third-quarter standalone net profit on the back of higher retail demand during the festive period. The Pune-based company posted a net profit of Rs 667 crore, marginally ahead of the average street estimate of Rs 635 crore and against Rs 475 crore in the year-ago quarter.

BHEL gained 1% at Rs 2217 after beating Street expectations by reporting a 31% jump in net profit to Rs 1,403 crore for Q3FY11 compared with Rs 1,073 crore in the corresponding period of the previous fiscal. Analysts expected the company to post a net profit of Rs 1,266 crore during the quarter.

And in the broader banking universe, Kotak Mahindra Bank, which saw a 16% jump in Q3 net at Rs 384 crore, hardened by 3.9% at Rs 413 and Yes Bank gained 3.8% at Rs 270 after its net profit in the third quarter soared 52% at Rs 191 crore.

On the other hand, Wipro shed 1.5% at Rs 456 on the BSE after reporting a lower-than-expectations 10% rise in consolidated net profit at Rs 1,318 crore for the third quarter ended December 2010 compared with Rs 1,203 crore in the corresponding quarter of the previous year. Consolidated revenues jumped  12% to Rs 7,829 crore from Rs 6,977 crore a year earlier. Moreover, the company surprised markets with the resignations of the joint CEOs of its IT unit, including Girish Paranjpe and Suresh Vaswani, effective January 31. Among the other IT peers, Infosys lost 1.3% at Rs 3245, while TCS closed flat, with a positive bias at Rs 1212.

And engineering giant L&T fell 3.5% at Rs 1649 after reporting a 10.8% jump in net profit to Rs 840.5 crore for the third quarter, which was short of market expectations.

Among the stocks whose Q3 results are lined up for the weekend, ICICI Bank zoomed by 5.4% at Rs 1065 and SBI rose 3.8% to Rs 2597, while Reliance Industries lost 1.4% at Rs 986. RIL announced its results post market closing on Friday, wherein the Mukesh Ambani-owned company's net profits grew 28.14% to Rs 5,136 crore for the third quarter ended December 31, 2010 compared to Rs 4,008 crore in the same period last fiscal.

Going ahead, we are in for an event-packed week as the continuing third quarter result season, monetary policy review on January 25 and expiry of the January derivatives contracts are likely to keep the market participants on their toes.