Yet another week of superlative gains for the market though there were worries of a correction. Sensex finally closed up 1.27% for the week with its highest ever closing. This week again saw FII interest continuing and there were more happy investors as the mid caps finally started moving filling in the valuation discrepancies with the large caps.
However this week was a mixed week with selective gains even amongst the large caps. The week saw a major dip on the back of selloff in power stocks as the US Congressional elections threw up results. The Democrats took control of both the houses. The Upper and the lower houses. This is expected to positive for alternative energy sources and negative for the pharma stocks and Power stocks. Democrats have been indicated to be opposed to the Indo-US Nuclear deal. The power stocks came in for some selling but were back up again on hopes and reports that the deal will go through. Suzlon was up nevertheless with a big bang. There was the sugar seesaw with a hope of exports being allowed and then the hopes being shattered for the stocks to crash down again. The EPFO (Employees provident Fund) decision was taken and they will not be allowed to invest into equities. At least not yet! Rs 170000 cr is to give 8.5% assured returns. A big problem but some positive for the private Banks. There is increased hope that the banks with retail borrowing will do well as the borrowing limits from EPFO may be curtailed. Inflation came in lower and Industrial growth numbers reported on Friday were very encouraging. Gujarat Ambuja was a strong gainer and a sole one. This probably is on the merger with ACEL which lands up with an increased holding for Holcim. Also there are talks that some creeping acquisition is on with the Swiss parent wanting to increase stake. Interesting to note that the two wheeler sector came in for major pressure. Maruti was smashed in the last two days as Nissan dumped it for an association with Mahindra. Reliance came in for selling in the middle of the week. There were reports that Jain and Gujarati Investors were exiting given Reliance's retail venture was selling meat as well. Surprising but thats Indian Markets.
The gainers which helped the Sensex were Gujarat Ambuja +9%, Hll +7%, ICICI bank +7%, HDFC Bank, +4%, Cipla + 4%,
The big losers this week were Bajaj Auto - 8%, Maruti -7%. Hero Honda -4%, Grasim -3%.Many stars this week.. karuturi Said it with flowers..Softwares went soft except Infosys, security going tight
Of the stars this week was Karuturi almost 5 times as it hit circuits more times than that. This is a Bangalore based company into flower exports. It is growing through its plantations in Ethiopia. Performance for last quarter was fantastic helped by Gherkins and also sapplings business. Japan is a new area for exports and to add to that there are some tie ups for flowers in India as well. All in all a good story waiting to be discovered. We expect the Funds to start buying as the market cap reaches certain minimum levels. We are not far from that yet.
It was a week for the mid cap technology stocks. Mphasis BFL was up 9%. Sasken was up 5%. and so were others. Infosys ADS offering is on cards and the stock was strong. This will increase the free float of Infosys and hence open the doors for the stock to be a part of the Nasdaq 100. TCS, Satyam and Wipro were weak and not surprisingly so. The dollar was weak and the rupee only got stronger. This is a pending worry for the software sector in an otherwise booming environment.

Another story emerging is security. Airports across the country went on a red alert post some security threat this week. We believe that this is going to be a way of life really. Papers carry sensational crimes and investment in security will be a theme to play that. Zicom is a play on that. We are positive here. Valuations may be a bit expensive but good things in life dont come cheap. Expect a detailed note on this company in days to come.
Next week is again a week with not much of negatives. The momentum is on and markets are on a high. The Nuke deal could be passed next week and that may have its impact on the markets. The ICC rights bidding is what could drive Zee up or down and there is the restructuring approval. The news of the Rs 1 lac car from Tata Motors will have some impact. The flow is good and interest into mid cap is increasing. We have our forte there. Do read the blog research and you will get a lot of cues from there.
Will be back next week with the best of the best in Research as always. Have a nice week end ! Adios Amigos !