Mumbai: This week has been one huge relief rally after the bloodshed we witnessed previously. Indian equities gained 7 per cent mainly led by global cues like the central banks' move to increase liquidity and the cut in China's reserve ratio.
However, things back home are still shaky. A very poor GDP number coupled with policy paralysis is hurting investor sentiment.
The Nifty surged past the 5000 mark on Friday to close up 340 points. The Sensex closed at 16,846.83, up over 1,100 points.
The number for economic growth, or the gross domestic product (GDP), for the quarter ended September 2011 came in at 6.9 per cent, the worst recorded by the country in nine quarters. The laggards were mining which experienced degrowth of 2.9 per cent, and the manufacturing sector which grew 2.7 per cent. The number would've been lower if not for services, which grew faster than expected at 9.3 per cent.
Adding to the gloomy economic scenario is the political logjam in the country. There is strong resistance from the Opposition party to opening up India's retail sector, due to which Parliamentary proceedings are halted.
Oil marketing companies cut petrol prices for the second time in a month in their fortnightly review. The precious resource has been made cheaper by Rs 0.72 per litre in Delhi and Rs 0.68 per litre in other parts of the country.
In company specific news, Reliance Industries has filed for arbitration against the government so as to resolve the issues surrounding cost recovery in the KG-D6 basin. The government had earlier asked the company to share certain amount of profits, but according to RIL, they haven’t fully recovered costs yet.
US FDA granted approval to pharma major Ranbaxy Labs to exclusively manufacture and distribute generic Lipitor. However, this is applicable only for 180 days.
In a bid to increase liquidity, central banks around the world reduced the cost of dollar loans by 50 basis points. This move will also help tame the dollar's rise. China also cut reserve ratios by 50 basis points so as to increase liquidity in the economy.
November auto sales till now are mixed. Mahindra & Mahindra , Tata Motors and Bajaj Auto continue to do well, but Maruti is still the underperformer of the lot.
Losers & Gainers:
Tata Motors (Rs 191.25; +11.5 per cent): November sales surged 41 per cent compared to a year ago, boosted by high sales in the Nano and Indica.
Hathway Cables (Rs 114.90; +11 per cent): Along with digitization in cables, reports of a possible increase in foreign direct investment in the sector to 74 per cent from the current 48 per cent boosted the stock.
Ambuja Cements (Rs 159.95; +8 per cent): The company reported sales of 1.83 million tonne in November, largely in-line with what the street expected. The company saw a 15 per cent growth in profit boosted by other income as a result of healthy cash and bank balance.
Bajaj Auto (Rs 1712.5; +4.25 per cent): 25 per cent growth in sales helped this two-wheeler major clock its best November numbers to date. A solid 42 per cent jump in exports also helped increase margins because of rupee depreciation.
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