Reference Auto

The Sensex seems to be on a roll and has risen for the third week in a row (on Friday) as market men await with baited breath for India Inc’s results, which kicked off with Infosys, which beat its own estimates but fell short of what Dalal Street expected but this is unlikely to keep the markets buoyant in the medium term.

The IT giant logged a profit rise of 15 per cent and this may keep the stock markets afloat in the very short term, though the bigger picture (of corporate earnings) is likely to emerge may be in 10-12 days.

Despite the cautious approach, the BSE’s benchmark index, the Sensex, managed a weekly gain of 95 points at the close of last Friday.

The Sensex opened during the week up at 18,896.24 points, moved in the range of 18,850 points to 19,000 points and ended the week at 18,858.04 points on Friday. This is a 0.50 per cent gain over the week before’s closing figure.

The NSE 50-share Nifty also went up by 33.45 points during last week, or 0.59 per cent, to close at 5,660.65 points.

Among a milestone last week, the benchmark index touched a 10-week high of 19131.30 points on the back of good inflows from foreign institutional investors or FIIs.

Foreign institutional investors continued their buying binge during last week and lapped up shares worth Rs 3,593.93 crore against Rs 6,256.10 crore in the previous week.

However, the benchmark index fell from its high in the wake of profit-booking in blue chip firms and heavy selling in metals and mining firms as the government proposed to share profits with people affected by projects.

This forced the Sensex to settle at 18,858 points (Friday close).

The draft Mines and Mineral Development and Regulation Bill will pave the way for coal miners to share 26 per cent of their profits while those mining other resources will have to shell out 100 per cent of their royalty to project-affected people.

This will dent miners margins substantially and shares in the sector will remain subdued.

On Friday, real estate stocks witnessed good buying, leading to the BSE-Realty index surging 7.12 per cent. Consumer durables and auto stocks also saw uptick in demand.

Now one of the key factors: Food inflation fell for the second week to a seven-week low of 7.61 per cent for the week ended June 25 (this is the latest figure available). It was 7.78 per cent in the previous week.

This has given a glimmer of hope to the bourses. But revival of the Telangana issue and resignation of MPs continued to haunt the markets and may take a slight toll in the near term.

Coming to the indices. The BSE-Consumer Durables index shot up by 4.15 per cent and BSE-Auto index by 3.63 per cent at the close of last week.

Small-cap and Mid-cap shares witnessed good demand last week. The small-cap index went up 1.83 per cent and mid-cap index by 1.37 per cent.

Major gainers among the Sensex stocks last week were DLF (up 7.49 per cent), Reliance Infra (up 7.56 per cent), Tata Motors (up 5.91 per cent), Bharti Airtel (up 3.82 per cent), Maruti Suzuki (up 3.56 per cent) and Bajaj Auto (which went up 2.56 per cent).

However, Sterlite India fell by 3.94 per cent, followed by Bhel (3.22 per cent) and ICICI Bank (3.17 per cent).

But the latest industry output or IIP growth of 5.6 per cent has cast a shadow on the country’s GDP growth, which could fall below the 8 per cent-mark and give stock market analysts a reason to worry about in the medium term.