Sensexational!

Last week witnessed Indian markets outperforming several others on the back of strong buying by Foreign Institutional Investors (FIIs) and of the short covering ahead of the F & O expiry. The Sensex was seen crossing its all time high and Nifty crossed it psychological level of 6300. Nifty has resistance at 6268 and 6300; above it, it has resistance only at 6357.

New York, United States: Traders work on the floor of the New York Stock Exchange. The Dow Jones Industrial Average rose over 100 points in response to the expectation the Federal Reserve will continue its economic stimulus program. Pic/AFP

Date
The state owned NHPC said that the company has set November 8, 2013 as the record date for determining eligible shareholders for the buyback proposal of shares worth over Rs 2367 crore. The company said that the board of directors has approved the buyback of up to 10 per cent of the fully paid-up equity shares of Rs 10 per share. The government is expected to get about Rs 2,000 crore from the buyback program, as the company holds an 86.36 per cent stake in the company. The company has a cash reserve of nearly Rs 3,000 crore.

Earnings
The tyre company, Ceat Ltd, came out with its earnings for the quarter ended September 2013, which showed a 20-fold rise in the consolidated net profit. The consolidated net profit stood at Rs 76.55 crore as compared to Rs 3.81 crore for the same period last year. During the period, the company net sales rose to Rs 1318.81 crore as compared to Rs 1213.43 crore in the same period, in the previous year. The company is also planning to invest Rs 650 crore to expand its Halol based manufacturing unit.

Profits
Pidilite industries announced a 23.85 per cent rise in the net profit for the quarter ended September 2013. The net profit stood at Rs 118.48 crore as against Rs 95.66 crore in the same quarter last fiscal. Net sales of the company during the period under review increased 21.59 per cent to Rs 1094.07 crore as compared to Rs 899.74 crore in the corresponding period last year. During the quarter, the company's revenue from industrial products grew by 26.81 per cent to Rs 216.15 crore.

Inflation
The Reserve bank of India in its policy meet on October 29 came out with many measures to fight inflation. The central bank in its meeting raised the repo rate by 25 basis points from 7.50 per cent to 7.75 per cent. The reverse repo is adjusted at 6.75 per cent and the CRR was kept unchanged. In order to provide some liquidity, the RBI has lowered the marginal standing facility (MFS), the overnight borrowing rate for banks to 8.75 per cent. This move may reduce the cost of funds for lenders. The move was a positive trigger for the markets as it was all inline with the estimates. The central bank but cut its growth forecast for the current fiscal to 5 per cent from an earlier projection of 5.5 per cent and cautioned that the retail inflation may remain above 9 per cent during the fiscal year.

Policy
On the global front, the major event the investors were waiting for was the policy meet of the US central bank. The two-day policy of the Federal Reserve, which started on October 29, was much awaited since people would get a picture on the fate its stimulus plan. In its meeting, the central bank said that it may continue its bond buying plan as it got a weak economy picture. But some of the global economic data was supportive. The euro-area inflation slowed to a level in almost four-year in October and the China's manufacturing PMI for October rose to a seven month high.

Earnings
Corporate earnings will be the major event to watch out for. The major ones, which may announce their results, are Tata motors, PNB, IOC, BEML, Indian Bank, Thermax, IGL, BHEL, Voltas, SBT, Sobha Developers, Eicher Motors, Central Bank, SREI Infra, MAX India, VTL and Finolex Cables. Crude oil outlook is weak and is likely to test $94 mark in the short term. It has resistance at $97.8 and $98.10. ING Vysia, Alembic Pharmaceutical and JM Financial are good for a short-term perspective and have already given a breakout signal.

Alex K Mathews is the author of Financial Services And Systems, as well as Option Trading: Bear Market Strategies published by Tata McGraw Hill. He is also the technical and derivatives research head of Geojit BNP Paribas Financial Services Ltd. The author may have a vested interest in investments he has recommended. Feel free to e-mail him at alex@geojit.com. Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

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