14:08
Moneycontrol BureauThe market posted spectacular rally this week with the Nifty gaining more than 3 percent, led by trade deficit data and Infosys Q2 results. Inflow of foreign money and hopes of possible deal to end US government shutdown also fuelled the rally.
The Sensex advanced 612.64 points or 3 percent to close at 20528.59 while the Nifty jumped 188.90 points or 3.2 percent to close tad below the 6100 level at 6096.20. It was an addition to one percent upmove in previous week.
Initial two sessions of the week were volatile ahead of earnings followed by a 266-points rally on Wednesday due to fall in trade deficit.
Trade deficit narrowed to USD 6.7 billion in September -- at lowest level in 30 months -- compared to USD 10.91 billion in last month. During the period, exports jumped 11.15 percent year-on-year to USD 27.68 billion while imports were down 18.1 percent at USD 34.4 billion due to lower import of gold and silver in September.
The trade on Thursday was dull ahead of Infosys Q2 earnings, but Tata Motors was the star. The stock rallied 5 percent on a quiet day after its UK subsidiary JLR -- the luxury car maker -- reported record retail sales of 43,181 units in September, a growth of 17 percent year-on-year and 55 percent sequentially.
The last day of the week was as good as expected by experts. The Sensex rallied 257 points as Infosys surprised the street with its quarterly earnings and guidance.
The stock gained nearly 5 percent to close at 30-month high after software services exporter revised FY14 dollar revenue growth guidance to 9-10 percent from 6-10 percent.
Net profit of the company rose 1.4 percent sequentially to Rs 2,407 crore and revenues grew by 15 percent quarter-on-quarter to Rs 12,965 crore -- stronger-than-forecast -- during the quarter. CLSA and IDFC maintained outperform rating on the stock while Barclays retained its overweight rating.
The rally on Friday was also fuelled by possible resolution to the US government shutdown impasse.
After a 4.5 percent rally in two weeks, the market looks expensive at current levels, feel experts. They believe the market may extend rally upto 6200-6300 levels, if FIIs flow continue going ahead, but then it may see correction.
Vibhav Kapoor of IL&FS feels the Nifty is likely to consolidate at around 6100-6200 levels. However, he cautions that the market may correct reasonably during the second half of this month.
They believe technology and healthcare companies should report strong earnings, which they provide some kind of support to market going ahead. However, rest of the sectors' especially banks and capital goods will be disappointing, which will hurt the market sentiment in October.
Meanwhile, the rupee gained 36 paise during the week to close at 61.07 against the US dollar on Friday.
Foreign institutional investors bought more than Rs 3,000 crore worth of equity shares during the week, including today's provisional data.
IIP data
Meanwhile, industrial output grew just 0.6 percent in August as against 2.8 percent in July due to slowdown in manufacturing and capital goods sectors. The data came in after markets hours.
The sluggish 1 percent growth of IIP ex-capital goods provides evidence that economic activity remains weak, despite the robust expansion of merchandise trade in the just-concluded quarter, says Aditi Nayar, Senior Economist at ICRA.
According to her, a pickup in rural demand post the kharif harvest is likely to be the chief growth driver in the immediate term.
Next week
Watch out for September inflation on Monday and quarterly earnings from IndusInd Bank, Reliance Industries, HDFC Bank, TCS, Bajaj Auto, Axis Bank, HCL Technologies, L&T and UltraTech Cement over the week.
Tech Mahindra and Pyramid Saimira will announce earnings on Monday. Reserve Bank of India increased FII investment limit in Tech Mahindra to 45 percent from 35 percent earlier.
SEBI has ordered bank accounts attachment in Pyramid Saimira case to recover penalties of Rs 1.3 crore.
(Posted by Sunil Shankar Matkar)
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