The Week Gone By - December 08, 2012 - HDFC Securities

Indian Markets

Indian benchmark indices moved up marginally over last week. Markets ended on a soft note on the back of the passage of the multi brand retail bill in both houses of the Parliament. The UPA government won vote on FDI in multi-brand retail in the both the houses. Now investors are waiting for how winter session of the Parliament pans out ahead.

Sensex gained 84 points, or 0.4% over previous week to 19,424. On the other hand, the broad based NSE Nifty too gained 28 points, or 0.5%, to 5,907. Meanwhile, BSE Midcap and Smallcap rallied 2.4% and 2.3% respectively.

Some key highlights during the week

- India's manufacturing sector beat the expectations of economists to grow at its fastest pace in five months in November, boosted by strong export orders and a surge in output, a business survey showed on Monday. The HSBC manufacturing Purchasing Managers' Index (PMI), which gauges the business activity of India's factories but not its utilities, rose to 53.7 in November from 52.9 in October.

- Morgan Stanley raised India's growth forecast for the current financial year to 5.4% from 5.1% projected earlier citing better than expected GDP growth in the September quarter and stabilisation in non-agriculture growth indicators.

- India's services sector growth declined in November, the lowest pace in 13 months, as new business grew at a slower clip, says an HSBC survey. The HSBC's Services Purchasing Managers Index (PMI) for November declined to 52.1 in November, down from 53.8 in the previous month, signalling the slowest rate of expansion in the current 13-month sequence.

- The growth in the economy is finally bottoming out and there are expectations that improvement is in store in 2013 according to Goldman Sachs. It sees growth picking up gradually to 6.5% in 2013 and further to 7.2% in 2014. India's Gross Domestic Product (GDP) could accelerate from 5.4% in 2012 and shall remain high through 2015-16. There are three factors, which are set to drive this view. A decline in oil prices in real terms over the next few years, a more favourable external demand outlook and domestic structural reforms, which can ease some supply-side constraints.

- Welcoming the nod accorded by Parliament to FDI in multi-brand retail, India Inc said this will send positive signals to foreign investors which will encourage investments and boost the economic growth. Industry chamber FICCI said the progressive reform will undoubtedly send positive signals and bolter the confidence of investors. Strategic investment opportunities will now open up global retailers and positively impact related sectors such as agriculture, food processing, textiles and consumer goods. At the same time, farmers and consumers will reap the benefit of this reform measure.

US Markets

The showdown in Washington over the fiscal cliff gave US stocks another volatile week, but the apparent political stalemate - just weeks before a potentially devastating fiscal crunch - was not the defining market issue. S&P 500 ended the week up just 0.1% after another week of trading largely tied to fiscal cliff negotiation news, which has pushed the market in both directions. The Dow climbed on the week by 1%, helped Friday by stronger-than-expected jobs data. However, tumbling Apple shares knocked the Nasdaq lower by more than 1% for the week.

Source : Equity Bulls

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