Bulls fall in love with stocks!
I was just guessin', At numbers and figures,
Pullin' the puzzles apart Questions of science,
Science and progress, do not speak as loud as my heart.
Love is blind and the bulls seem to be closing their eyes on any concerns coming their way. The indices are at yet another high. The news flow this week has not been very encouraging. To begin with, Infosys cut guidance. Industrial production for May dipped. Bajaj Auto results disappointed and the coming quarter is again expected to be weak. Valuations, though being questioned, are taking a back seat temporarily. FIIs have lend support to the bulls. Higher metal prices on LME added to the positives.
Tech stocks remained lackluster while metals, Real Estate, Power and Construction stocks clocked gains. Hindalco, REL, L&T, BHEL and Tata Steel were among the major gainers guiding the Sensex above the 15,200 mark. Interestingly, the markets have been changing its leaders from time to time.
The major indices recorded their fifth weekly gain with benchmark Sensex adding 308 points or 2.06% to close at 15272 and NSE Nifty advancing by 120 points or 2.75% to close above 4500 mark at 4504.
Global indices too had a good run. Hang Seng Index closed above 23,000 for the first time. Shares also rose after Fitch Ratings upgraded Hong Kong's long-term foreign-currency debt rating to AA, the third-highest ranking, from AA-. The US markets managed to shrug off disappointing earnings forecasts from the retail sector, renewed concerns about the sub-prime mortgages and rising crude oil prices. Dow Jones recorded its biggest gain since 2003 on Thursday.
Metal stocks shone brightly on Dalal Street. Talks of consolidation in the global metal industry and firm metal prices contributed significantly to the rise in metal stocks. Takeovers in the metals industry and higher commodity prices have been driving up metal stocks in recent weeks. Alcoa led the gains in US Market after Rio Tinto's plan to buy Alcan spurred expectations of more takeovers. SAIL skyrocketed by over 23% during the week. JSW Steel was another performer of the week as the scrip rallied by over 15% to Rs721. Heavyweight Tata Steel was among the major gainers advancing over 11% to Rs692. Hindalco surged by 13% to close at Rs174.
Power stocks were in the limelight on back of increase in Government spending for electricity generation. REL led the charge among the power stocks after Anil Ambani, said he could raise Rs1 trillion to invest in his energy, telecommunications and finance group to tap opportunities in the world's second-fastest growing economy. Tata Power rose by nearly 4% to Rs685 and REL advanced by 13% to Rs675.
Capital Good stocks continued its strong uptrend trend as the index yet again rose over 2.2%. BHEL led the way as the scrip advanced over 8.5% to Rs1690, L&T gained 1.5% to Rs2400, Siemens surged nearly by 5% to Rs1,476 and Punj Lloyd added 3.5% to Rs277.
IT stocks continue to be laggard again this wining week loosing by over 1% in a historic day week for the markets. Infosys reported a consolidated net profit of Rs10.79bn for Q1 FY08 versus Rs11.44bn in the previous quarter. The company also missed its revenue guidance for the first quarter. The company says its FY08 revenues will grow by 17-18% year-on-year and earnings per share (EPS) by 13-14%. FY08 EPS is now seen a t Rs78-79. TCS was down by over 2% to Rs1136, IT Bellwether Infosys slipped 1.8% to Rs1935, Wipro was declined 1.3% to Rs512 and Financial Technology declined 1% to Rs2844. However, Satyam Computer gained 1% to Rs493.
Banking and Real Estate stocks advanced further on expectations that Government may not tinker with the interest rates in RBI meet later this month. DLF, the real estate major rose nearly by 5% to Rs600, IVRCL Infrastructure surged by over 8.5% to Rs423 and Akruti Nirman added 4.2% to Rs496.
Auto stocks gained momentum this week as the index was up by over 3% led by frontline stock Tata Motor as the scrip paced ahead by over 7.5% to Rs766, followed by M&M which gained over 4% to Rs821, Maruti advanced 3.5% to Rs825 and Ashok Leyland added 2% to Rs39.