Goldman Sachs:: Draft mining bill overshadows strong foreign inflows to cap NIFTY’s weekly gains at 0.6%

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Draft mining bill overshadows strong foreign inflows to cap NIFTY’s weekly gains at 0.6%
 All sectors ended in the green with Public Sector Banks (+2.2%) and Infra stocks (+1.3%) outperforming wow.
 Strong foreign inflows of US$ 1.1bn for the second week, but DIIs sold US$ 0.58bn, as of the close of July 06, 2011.
 Commodities gained 1.8% wow. Silver gained 2.4% but Natural Gas fell 3.5% wow.
 Markets await May IP release, June WPI data and 1QFY12 earnings announcements next week.
Overview
SENSEX scaled 19000 on Thursday but pulled
back sharply after major mineral mining stocks
dragged equities lower on Friday (-1.2%). A panel
of ministers on Friday approved a bill proposing
that miners pay 26% of their profits to people
directly affected/displaced by their operations.
The news led to NIFTY paring its gains from
Thursday (+1.8% after weekly data showed that
inflation cooled YoY). Public lenders and real
estate stocks were resilient. Tech stocks rose 0.7%
wow on expectations of strong profits in Q1 FY12.

Foreign and domestic flows
Foreign buying has totaled US$ 1.6bn ytd while DIIs
have bought US$ 2.8bn as of the close of July 06,
2011.
Earnings sentiment
MSCI India Financials had the strongest EPS
sentiment (4.3%) wow.
Commodities
Natural Gas underperformed wow (-3.5%) and
Mustard seeds rebounded 19.5%.
Focus page
Equity Issuance in 1H 2011
Events & Earnings
May IP (Jul 12), June WPI (Jul 14).
Q1 FY12 results: Infosys (Jul 12), TCS (Jul 14).