Fears of monetary tightening and restriction of US banks was an overhang on the markets during the early part of the week. On Friday, the RBI left interest rates unchanged while raising the cash reserve ratio by 75 basis points. The BSE Sensex fell 502 points or 3 per cent to 16,358, while Nifty tumbled 154 points or 3.05 per cent to 4,882 during the week.
Midcaps and smallcaps underperformed both the broader indices; BSE Midcap index fell 4.04 per cent and BSE Smallcap index dipped 5 per cent. Foreign investors pulled out around $1.6 billion in the last week of January, the first net outflow in the last 12 weeks.
Markets this week
With December quarterly results season ending largely on a good note, the next major trigger for the markets would be the Union Budget. For the next week though, global cues could take centrestage. Auto and cement shares will be in focus as companies release their monthly sales volume for January 2010.
Redemption pressure may weigh on the global markets as latest data from global fund tracker EPFR Global shows that emerging market equity funds posted first net outflow of $609 million in the last 12 weeks for week ended January 27. Investors would also need to watch the response to the FPO of NTPC as lower-than-estimated collection from sale of stake in state-run firms could upset the fiscal deficit calculations.
| Stock to watch INDIAN OIL CORP  Last week's close (Rs) 301.32 Prev. week's close (Rs) 308.45 Week's high (Rs) 310.43 Week's low (Rs) 295.22 Last week's ave. daily turnover (Rs cr) 23.89 Prev. week's ave. daily turnover (Rs cr) 27.37 Number of up/down move 0/4
Indian Oil Corporation's (IOC) stock could come into play after the company announced insipid numbers for the December 2009 quarter, just a couple of minutes before markets closed on Friday. Reduced compensation and burgeoning under-recoveries for selling petroleum products below the market rates resulted in IOC registering a 76.4 per cent year-on-year drop in its net profit to around Rs 700 crore. |
Total income fell by about 1.7 per cent to Rs 71,100 crore in the same period. However, reports that the government might soon give the go-ahead to free market-pricing for petrol and partially de-regulating diesel prices could benefit state-run refiners like IOC. At Rs 301.30, the stock trades at 5.4 times its 12 month trailing EPS of Rs 55.8.
