Markets up 0.8% for the week

Fri, 10 Feb Closing

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   01:30 pm   

Indices in the Indian stock markets did come off the day's lows during the closing stages. But the buying momentum was not strong enough to take them into the positive and as a consequence, they had to close the day in the red. BSE-Sensex edged lower by around 80 points (down 0.5%) while decline on the NSE-Nifty was of the order of 30 points. BSE Mid cap and BSE Small cap indices closed nearly flat today. More than two stocks gained for every one that closed the day in the red on the Sensex.

Most Asian markets also ended lower today with Europe too opening on a negative note. The rupee was trading at Rs 49.7 to the dollar at the time of writing.

With today's decline, gains for the whole week have come a shade below 1%. This also takes the total returns from Sensex since the beginning of the year to close to 15%. Not a bad figure by any stretch of imagination. In the current environment though, it will be difficult to say whether the strong performance will be sustained all through the year. While central banks are doing all they can to provide liquidity, the debt overhang is proving to be a tough nut to crack and hence, most economies continue to remain vulnerable to further shocks. For India though, an opportunity to make 12%-15% per year over the long term is pretty much baked in the cake. Thus, any severe correction from the current levels and the future returns would be that much higher we believe.

Industrial solutions provider, Honeywell Automation was amongst the best performing mid cap stocks today as it surged by more than 7%. The company has reported a strong 31% growth in net profits for the quarter ended December 2011. This came on the back of an almost similar topline growth. For the full year ending December 2011, net profits were higher by just 2% YoY despite a 19% growth in topline. Besides the strong performance during the quarter, the fact that the company is also a strong delisting candidate seems to have led investors to line up for the stock. It should be noted that at present, the company does not qualify for the mandatory 25% public holding criterion that is likely to be in place soon. Thus, rather than offer more shares to the public, it could well go in for a buyback offer. However, this is just a speculation and there is no confirmation on it right now.

Gujarat Gas, India's largest private sector gas transmission and distribution company said that it has entered into an agreement with BG India Energy Solutions for the purchase of re-gasified LNG. The volume is in the region of 1 mmscmd and the supply agreement would be in place from April 2012 to December 2012. This contract, in addition to the existing ones, will take care of majority of the firm's gas requirements for its markets during the current calendar year. The company gets nearly 75% of its gas requirements from the PMT fields through GAIL India. The stock of Gujarat Gas closed marginally lower on the bourses today.