The week ending Friday saw much volatility at the equity markets. The markets were weighed down through Monday and Tuesday due to political uncertainty in Greece. The euphoria caused by unchecked fall in global crude prices has now died down and has been replaced by growth concerns. The domestic currency, however, recorded its highest weekly gain since May 2013. The week closed with the rupee poised at 62.33 a dollar. Expectations of a rise in exports in the final quarter of this fiscal year may keep the rupee buoyant.
The possibility of Greece exiting the European Union kept the Indian equity markets at surprising lows through the early part of the week. Recovery did come but the benchmark indices closed the week in the red. The 30 share S&P BSE Sensex lost some 430 points or 1.54 percent (weekly comparison) to close at 27,458.38. On Tuesday, the Sensex crashed about 857 points triggering concerns that the Bull Run may after all be over.
The NSE 50 share Nifty closed Friday’s trading session at 8,285 points, with a weekly loss of 111 points (1.32 percent). BSE small-cap and CNX Mid-cap indices performed slightly better than the benchmark indices and closed the week with a loss of about 1 percent each.
A number of market gurus are predicting a gladdening performance of the equity market in months to come. The banking sector, metals and power felt a sharp selling pressure this week. The total turnover recorded at the BSE was INR 15,597.01 crore (up from INR 11,892.08 crore the previous week) and at the NSE INR 83,908.67 crore (up from INR 56,194.52 crore).
Crude fell to alarming lows through the week. On Tuesday, prices fell below USD 50 a barrel lending much volatility to the equity markets. Gold closed the week at about 26,800, a fall of about 1 percent. Silver also registered a fall this week, closing at 36,833, a fall of about 0.33 percent. FIIs are believed to have sold domestic equity worth INR 2,638.72 crore this week as reported by provisional data from the markets.
Infosys gladdens investors
Monday through Thursday had been bumpy for the IT space with market gurus predicting that tech major Infosys would fall well short of its Q3 targets. The weakness exhibited by the domestic currency over the past few weeks has not helped either. Friday was an entirely different story, though. Indian software and technological services exporter Infosys Limited posted a third quarter profit of about 13 percent.
The IT giant also announced that it expected a sales growth of about 7 to 9 percent for the current fiscal year. Though lower than its growth in the last fiscal year of 11.5 percent and the expectation of the industry’s growth of about 15, the growth Infosys aims at is in sync with its annual growth targets.
In the quarter ending December 2014, the company added 59 new clients and attained a profit of about INR 32.50 billion and recorded revenue of INR 137.96 billion. The markets reacted positively to the announcement. The Infosys opened at 1985 and sank to about 1914 before bouncing to an intra-day high of 2,108 and closing at 2,073.6 (BSE). On Friday, Infosys also announced 500 percent increase in its start-ups fund. The fund value is currently worth USD 100 million and Infosys intends to grow it to USD 500 million.
Budget may make way for more disinvestment
Without clearly outlining which public sector companies the Government shall be reducing its stake in, Finance Minister Arun Jaitley said that the Indian markets may get ready for aggressive disinvestment in the months to come. These decisions are likely to be announced by the NDA Government before March 31. Of the Government’s disinvestment target of INR 58,425 for this fiscal year, about INR 1,700 crore has been raised through a 5 percent sale of the stake in SAIL.
Other companies that have been lined up for a stake sale by the Government include ONGC, NHPC and Coal India. “As far as disinvestment figures are concerned, we still have close to three months left. And I can only tell you this is going to be a period of great activity as far as disinvestment is concerned”, said the Finance Minister this week. This phase of major disinvestment is an attempt on the Government’s part to achieve the 4.1 percent fiscal deficit target for the current financial year. The Fin Min also said that his budget, due to be announced in February, will set the direction for economic growth in the country. A number of important decisions will be announced in the upcoming budget, he said.
Next telecom auction planned
The Government of India has announced that the next lot of 2G and 3G airwaves would be auctioned out starting from February 25, 2015. The 800MHz (103.75MHz), 900MHz (177.8MHz), 1800MHz (99.2MHz), and 2100MHz (to be announced later) bands auction will be initiated by the Department of Telecommunications and the Notice Inviting Applications (NIA) for these has been issued. “The reserve price approved is INR 3,646 crore pan-India per MHZ in 800MHz, INR 3,980 crore for 900MHz band pan India excluding Delhi, Mumbai, Kolkata, and Jammu and Kashmir; INR 2,191 crore pan-India (excluding Maharashtra and West Bengal) in 1800MHz band”, said the DoT statement.
Suzlon’s Gujarat investment plans
Suzlon announced an investment of INR 24,000 crore over the next 5 years into energy projects in Gujarat. This announcement came despite the company’s resolve to reduce its INR 8,000 crore debt in half by the end of this financial year. The INR 24,000 crore investment will be utilized to set up a 3,000-MW solar and wind energy producing plants. Two of these plants will be wind capacity plants – one 2,000 MW on-land wind capacity unit, and one 500-MW offshore wind capacity plant. Apart from this, a 500 MW solar capacity unit will be set up in the Kutch coast.