Subdued global cues and concerns of below-par monsoon were a drag on the broader indices in the initial part of the week. Nifty lost 69 points during the week till Thursday.
However, Indian indices gathered steam near the weekend with the Nifty spurting 134 points on Friday. Nevertheless, the introduction of a free-float methodology in Nifty and expiry of derivatives meant volatility through the week. The Nifty rose 1.4 per cent or 65 points to close at 4,376 while the Sensex ended 1.7 per cent higher at 14,765.
Markets this week
Markets are likely to experience volatility ahead of the Budget. Positive global cues could boost sentiment. During the week, Annual Economic Survey on July 2 and Rail Budget on Friday are important events that markets would be watching closely.
However, foreign investors have turned jittery ahead of the Budget. They have sold stocks worth Rs 2,495 crore at the net level in the previous week, compared to net buying of Rs 4,400 crore in the first three weeks of June. Investors would be closely watching the progress of Monsoon which is believed to be 93 per cent of the long term average.
| STOCK TO WATCH Tata Motors
Shares of Tata Motors could be in action after the company posted losses for the first time in eight years. While consolidated sales stood at Rs 71,000 crore, net loss mounted to Rs 2,505 crore for 2008- 09. | ||||||||||||||||
The 2009 numbers are not comparable as the previous year’s profit numbers (Rs 2,167 crore) are for the standalone entity. The company purchased the two marquee entities—Jaguar and Land Rover in June 2008.
The poor consolidated performance is being attributed to the performance of Jaguar Land Rover (JLR) which is battling the economic downturn in key markets. Drop in sales in the US and European markets dragged JLR to record losses of around Rs 1,800 crore.
However, Tata Motors on a standalone basis turned in a profit of Rs 1,000 crore, a drop of 51 per cent over last year. The company laid off 2,000 people at JLR, and chances of further cuts in the work force, to rein in costs to manage profitability, are on the cards.
