Goldman Sachs, NIFTY posts best weekly performance (+5%) in 6 weeks; Q2FY12 earnings kick off

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NIFTY posts best weekly performance (+5%) in 6 weeks; Q2FY12 earnings kick off
 CNX Info. Tech. (+8.5%) and CNX Banks (+6.9%) outperformed broader indices wow.
 Ytd foreign outflows of US$ 229 mn and domestic inflows of US$ 5.6 bn as of close of Oct 12, 2011.
 Aug IIP growth rose to 4.1% yoy (vs. consensus forecasts of 4.7% yoy), slowdown in growth sharper than expected.
 Sep WPI inflation fell to 9.7% yoy, in line with consensus. Core inflation also declined (to 7.6% yoy from 7.7% yoy in Aug).
Overview
NIFTY surged 5% this week after Infosys raised its
FY12 EPS guidance and reported in line 2Q
results. Positive news flow from the euro zone
also helped lift Indian equities strongly, despite a
disappointing IP print for August. Our India
economists see stronger reasons for the RBI to
pause (recent IP data along with other metrics
suggest growth is slowing faster than expected)
than to continue hiking rates.  Indian govt bond
yields continue to climb higher with 10 year yields
at 8.79% as of Friday’s close.
NIFTY price performance
Source: NSE, DataStream, GS Global ECS Research.
Foreign and domestic flows
Foreign investors bought US$ 327mn wow (as of
Oct 12, 2011).
Earnings sentiment
MSCI India Info. Tech. saw the strongest EPS
sentiment (3.6% wow). MSCI India is trading at
13.1x forward earnings, at a premium of 27% to
MXAPJ.
Commodities
MCX Commodity Index surged 4.2% wow, led by
Turmeric (+10.8%), Copper (9.4%), Silver (+7.5%)
and Crude Oil (+7.5%).
Focus
Q2FY12 Earnings Calendar & Preview
Q2FY12 earnings results
TCS, HDFC (Oct 17), Hero MotoCorp (Oct 18),