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Sunday, February 12, 2012

Weekly Newsletter - Feb 12 2012

After a strong start to 2012, the equity markets are showing some signs of fatigue. Although the Nifty crossed 5400 this week, the frontline Indian stock indices seemed to struggle in their endeavour to move higher. World markets too lost some steam amid ongoing uncertainty over Greece.

Most central banks are in defensive mode right now as they try to contain the spill-over effect from the eurozone debt crisis. China is a bit of a conundrum at the moment.

India's GDP to grow by 6.9% in FY12: Govt

The Indian economy is likely to grow by 6.9% in the ongoing fiscal year, as aggressive monetary tightening by the RBI, coupled with a bloated fiscal deficit and slowing global growth hurt domestic investments and consumer demand. The Government today released it's advance GDP estimate for the year ending on March 31, 2012. India's GDP is expected to expand by 6.9% in FY12 as against a healthy 8.4% in the last two years. The Indian economy had expanded by a modest 6.7% in FY09 in the wake of the global financial crisis. Srikant Kumar Jena, Minister of State (Independent charge), Ministry of Statistics & Programme Implementation released the advance estimates of national income 2011-12. The ‘Agriculture, Forestry and Fishing’ sector has shown a growth of 2.5% during 2011-12, as against 7% growth rate clocked in the corresponding period of last fiscal year. Growth in Mining and Quarrying is estimated at -2.2% (5%) during 2011-12 while the Manufacturing sector is estimated to grow by 3.9% during 2011-12. Construction sector is likely to expand by 4.8% in FY12 versus 8% last year. The GDP growth rate of 6.9% during FY12 has been due to an 8% growth rate in ‘Electricity, Gas & Water Supply’, 'Trade, Hotels, Transport & Communication`, and 'Financing, Insurance, Real Estate and Business Services'.

Market gains for 6th straight week

The Indian markets maintained its uptrend for the sixth week in a row. The Sensex up 0.82% and the Nifty up 1.05%
Headlines for the week
India’s GDP to grow 6.9% in FY12
December IIP at 1.8% vs 5.9% in November
January car sales up 7.2%, bikes rise 10.5%
FM to present budget on March 16
Bharti Airtel Q3 consolidated net profit at Rs1011 crore
ONGC Q3 net profit declines by 5%
HUL Q3 net profit up 18%

Focus to shift to expectations from Budget

With the 3rd quarter earnings season almost over, the focus will shift to expectations from Union Budget 2012/13. On the macro front, the government unveils monthly inflation data for January 2012 on Tuesday, 14 February 2012.

Aditya Birla Nuvo and Oil India unveil Q3 results on Saturday, 11 February 2012. State Bank of India, Cipla, Reliance Power, Indian Oil Corporation, Coal India, Sun Pharmaceuticals Industries and Steel Authority of India (Sail) unveil Q3 results on Monday, 13 February 2012. Tata Motors, Reliance Infrastructure, Jaiprakash Associates, Videocon Industries, Essar Oil and Shipping Corporation of India unveil Q3 results on Tuesday, 14 February 2012.

Market slides as industrial production growth slows sharply

Key benchmark indices edged lower in a volatile trading session as data showing a sharp slowdown in industrial production growth in December 2011 and weakness in European shares hit sentiment adversely. The barometer index, BSE Sensex, was down 82.08 points or 0.46%, off about 140 points from the day's high and up close to 120 points from the day's low.

The Sensex has jumped 555.14 points or 3.22% in February 2012 so far. The barometer index has surged 2,293.77 points or 14.84% in calendar 2012 so far. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 2,612.83 points or 17.26%. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 2,062.45 points or 10.41%.