Jan 12, 2002|
Jitters beneath the calm
Some may say that the past week has not been good for the Indian bourses. But take a closer look and you find that the BSE has declined by a marginal 0.4% this week. In contrast, the Dow Jones declined by 2.5% and the NASDAQ by 1.8%.
Considering last fortnight, the Sensex has gained 5.6%. That’s quite a surge, as not much has changed. Of course, the NASDAQ gained 1.8% during the same period and thus contributed to the tech surge at home. Anticipation of Infy’s third quarter results also took the tech juggernaut higher, not to forget the news that Satyam is looking to divest its stake from loss making subsidiary, Sify.
However, the bourses showed glimpses of nervousness when the Indian army chief termed the situation on the LoC as ‘tense’. This was enough the send the market movers scurrying for cover and the bourses declined nearly 80 points (over 2%) for a few minutes. However, this volatile movement was enough indication of jitters beneath the calm surface.
Globally, there is anticipation among analysts and investors alike that 2002 is going to be better. The global economy is poised to recover and thus stock markets (especially tech stocks) will see a good year. However, the US continues to face higher jobless claims and earnings warnings show no signs of waning. In India too, though Infosys beat its owns earnings estimates in 3QFY02, its cautious 4QFY02 estimates left market movers disappointed leaving signs that the technology sector is unlikely to improve any time soon.
However, for India, it is the old economy pivotals that have been the key gainers. Auto and cement despatch numbers have buoyed sentiment in the sectors. With disinvestment picking up pace, PSUs are having a good time. So in effect, the feeling is positive for 2002, notwithstanding the tech tremors.
However, the deterrents continue to be the tensions on the Indo-Pak border as well as the government’s spiraling fiscal deficit. Of course, one big-ticket disinvestment could be a trigger.
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