Visit http://indiaer.blogspot.com/ for complete details Markets remain flat
Markets closed flat during the week, which was marked by highly volatile
sessions. The Sensex ended the week higher by 0.2%, while the S&P CNX
Nifty increased by 0.1%. However, BSE mid-cap and small-cap indices
outperformed their large-cap counterparts, up 1.4% and 0.9%, respectively.
Volatility was backed by mixed global cues, with a surprise rate hike by
China, but strong performance by global markets. Earnings reported for
2QFY2011 met and in some cases beat the street's estimates. BSE healthcare
and BSE oil and gas (O&G) indices led during the week, up 2.8% and
2.7%, respectively. The BSE metal index, however, was the biggest loser,
down 2.7% during the week.
BSE O&G index - RIL leads the way
The BSE O&G index gained 2.7%, outperforming the Sensex. RIL, the
major contributor to the index (58.8% weightage), gained 3.9% after
prolonged underperformance relative to the Sensex. OMCs’ stocks witnessed
gains during the week, following the correction in the preceding week.
HPCL, BPCL and IOC gained 1.8%, 3.2% and 6%, respectively. Further,
with the recent hike in petrol prices, the government reposed its faith with
regard to petrol price deregulation. Subdued crude price, which stood flat
(~US $81/bbl), also helped the companies. Upstream oil companies like
ONGC and GAIL remained flat, as investors awaited news flows regarding
further oil reforms. Cairn also remained flat (down 0.6%), as it continued
to wait for government clearance for its deal with Vedanta Resources. Essar
Oil was the major gainer (up 7.2%) from the index post good 2QFY2011
performance. After the recent increase in the stock prices, we
have a Neutral view on the sector and our top pick is RIL.
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