Weekly Wrap-Up - January 5, 2013 - Eastern Financiers

Clambering almost 24% in the calendar year 2012 aided by loads of reformatory measures in the Winter Session of Parliament along with beefy inflow of foreign funds among others– markets initiated the New Year, 2013 bang on with the benchmark Nifty hitting its two year high on Wednesday, breaching the key psychological level of 6,000 following the U.S. deal on its so-called "fiscal cliff" that sparked broad buying. Assenting numerals on manufacturing PMI, assorted automobile sales growth and the persistently healthy foreign funds inflow aided the markets that surged to the tune of almost two percentage point.

The approval to the ardently awaited US "Fiscal cliff" simmered optimism across the markets. U.S. lawmakers approved a plan to prevent huge tax increases and delay spending cuts that together would have pushed the world's largest economy into a likely recession.

Also aiding to the sentiment, India's manufacturing activity surged to a six-month high in December boosted by strong factory output and a spike in new orders, both of which hit their highest levels since June. Even India's services sector grew at its strongest pace in three months during December, as company order books filled at the quickest rate since last February. The HSBC services Purchasing Managers' Index rose to 55.6 in December from November's 52.1. Services, ranging from banks to restaurants, make up nearly 60% of India's economic output and a recovery brightens the outlook for Asia's third-largest economy. The sector has been the lone bright spot in an otherwise slowing economy.

The last calendar month fared assorted for the automobile sector with Tata Motors, Mahindra & Mahindra, Bajaj Auto and Maruti Suzuki posting accelerated growth in sales, while TVS Motors and Ashok Leyland landed with subdued set of numerals for December that generally sees sluggish sales as buyers postpone their purchase to the New Year.

The first week of the year continued to mark healthy inflow of foreign funds to the tune of Rs. 5160.83 crores which persisted to aid the markets.

Gains were witnessed across the board, except for the defensive FMCG sector that marginally edged lower. Realty, PSU , Oil & Gas and Consumer Durables among others attributed to the surge. Broader indices decisively outperformed the benchmarks clambering almost 3-4%.

Shares of upstream oil companies rose as a committee set up under the chairmanship of Dr. C. Rangarajan, Chairman of the Economic Advisory Council to the Prime Minister to look into the Production Sharing Contract Mechanism in petroleum industry, suggested major changes in the current Production Sharing Contract Mechanism and changes in gas pricing.

Source : Equity Bulls

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