The Indian stock market rose last week due to positive global markets and domestic economic data. This week, many major companies will announce quarterly results, which are expected to show improved profits over the previous quarter. The monetary policy announcement on April 17 is also expected to lower interest rates. Overall, the document expresses an optimistic outlook for the Indian economy and stock market in the coming year, expecting GDP and earnings growth that will push the Sensex up 30% from current levels.

1. The World This Week
Apr 02 – Apr 06, 2012

2. Equity View:
The Nifty moved up by 2.5% last week from the previous week’s closing. This was on the back of positive global market
sentiments and positive macro economic data. Car sales numbers for the month of March have continued to surprise on the
positive.
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This week is going to be data heavy as Infosys would declare it Q4 results on 13 April. Most of the major companies would
announce their results this week. Our own sense about the results is that the earnings of majority of companies have
bottomed out in Q3 and that Q4 earnings should have a definite improvement. We are expecting a PAT growth of around 20%
y-o-y basis in Q4, which would be a significant improvement in PAT growth which was witnessed at 12-13% y-o-y in Q3.
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The markets are looking forward to the Monetary Policy which will be announced on 17 April 2012. We expect a 25 basis
points repo cut to be announced in this policy review. We believe that both the quarterly results and monetary policy will act
extremely crucial in determining the short-term direction in the market.
Our own belief for FY 13 is that Indian equities will outperform on back of easing monetary cycle and a bounce back in
corporate earnings and growth numbers. We are expecting a GDP growth of around 7-7.5% this year and an inflation rate of
around 7% taking the total GDP growth in nominal terms to around 14-14.5% this should also equal to the normal earnings
growth rate for most of the companies. We are expecting almost a 30% increase in Sensex from the current levels and
expecting 22,500 as our yearend target for Sensex by March 2013.
News:
DOMESTIC MACRO:
The HSBC manufacturing Purchasing Managers' Index (PMI), compiled by Markit, eased to 54.7 in March from 56.6 in
February. In January, the PMI reading was 57.5.
India's exports grew an annual 4.3% to $24.6 billion in February, while imports rose 20.7% to $39.8 billion. The trade
deficit widened to $15.2 billion during the month from $14.8 billion in January
The Reserve Bank of India (RBI) has eased its overseas direct investment norms by waiving the need for Indian entities
to seek its approval to open foreign currency accounts abroad.
GLOBAL MACRO
Euro:
Markit's Eurozone Manufacturing Purchasing Managers' Index (PMI) dropped to 47.7 last month from 49.0 in
February, in line with a preliminary reading. It has now been below the 50 mark that divides growth from contraction
since August.
Spanish borrowing costs jumped at bond auctions on Wednesday, spreading the fear in European markets of a return
of the euro zone debt crisis and overshadowing a successful step back into debt markets by neighboring Portugal.
Spain sold €2.6 billion of debt, at the low end of its target range, with a bond maturing in 2020 yielding an average
5.338%, higher than a forecast 5.2% and up from 5.156% when it was last sold in September.
A European bailout for Spain is not on the table and would be the worst possible outcome for the country's debt
troubles, Economy Minister Luis de Guindos said in an interview with state radio late on Thursday.
Greece extended a deadline for a second time on Thursday for bondholders to accept a debt swap, giving Athens a
little more breathing space to formulate a response to investors who have refused to sign up for the landmark deal.

3. US:
The number of Americans lining up for new jobless benefits dropped to a seasonally adjusted 357,000 in last week,
lowest level in nearly four years.
President Barack Obama signed into law on Thursday a bipartisan bill to kickstart small business growth and he
promised rigorous oversight to make sure the measure does not harm investors, as critics have warned. The bill will
make it easier for small firms to raise capital and go public marked a rare accomplishment in an gridlocked Congress.
China:
The seasonally adjusted HSBC Services Purchasing Managers Index (PMI) stood at 53.3 in March, down slightly from
February's 53.9, but signaling healthy growth with the new business sub-index extending an unbroken run of
expansion to 40 months.

4. Satadru Mitra Varun Goel Jharna Agarwal
Palak Nanjani Abbas Naheed Kanika Khorana
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