Online BusinessMarkets at a glance
The broader indices opened higher for the first two days. Since then, index stocks struck to a narrow range as investors preferred to wait for the December quarter results. Nevertheless, markets ended the week at a 22-month high with the Sensex ending nearly flat and Nifty gaining 13 points or 0.8 per cent to 5,245.
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The average volume in the F&O segment was about Rs 50,000 crore, a tad lower compared to previous weeks and despite extended trading hours. Signals from emerging markets looked brighter compared to developed markets. HSBC"s Emerging Markets Index that measures manufacturing and services output moved up to 56.1 in the December quarter (55.3 at September end).
What to expect this week
The markets might witness stock-specific action as the quarterly result season kicks off. Markets also await IIP numbers to be unveiled on January 12 and the monthly inflation data due on January 14. Major companies that would announce December quarter results this week include Infosys and Bajaj Auto.
RBI deputy governor would hold a pre-credit policy meet with bankers; a meeting is also scheduled with primary bond market dealers during the week. Foreign investors were net buyers in equity worth $800 million in the first week of January and their actions could influence the market’s direction.
Stock to watch
INFOSYS TECHNOLOGIES
Last week"s close (Rs) 2,464.32
Prev. week"s close (Rs) 2,603.18
Week"s high (Rs) 2,656.35
Week"s low (Rs) 2,459.00
Last week"s ave. daily turnover (Rs cr) 300.49
Prev. week"s ave. daily turnover (Rs cr) 242.80
Number of up/down move 2/3
IT bellwether Infosys would kick-start the results season on January 12. Expect a flattish top-line growth for the December quarter. Operating profit margins could decline by about 180-200 bps on the back of wage hikes and higher SGA expenses.
Net profits are expected to decline by 2.5-4 per cent sequentially. The rupee, which appreciated by 3.5 per cent during the quarter, could be a drag on profitability.
Nevertheless, the stock could get a boost if the company revises its future guidance upwards on the back of its financial services segment doing well. At Rs 2,465, the stock trades at 23 times its 12-month trailing EPS of Rs 106.