X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Eventful week - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jan 24, 2004

    Eventful week

    It was one of the most volatile weeks ever witnessed on the bourses in the recent past with 3-digit falls and rise (in the Sensex) being a common feature during the week. Apart from last week's profit-taking sentiments spilling over into the current week, uncertainties regarding the fate of participatory notes in the Indian markets also aided the havoc that prevailed during the week. The indices, finally, closed the week with losses of 2.2% (Sensex) and 2.8% (Nifty).

    Breaking off from last week's bear carnage, the indices closed the first trading day (Monday) of the week on a strong footing, giving indications that the long-overdue correction was over. However, as unexpected as it could be, markets got a surprise the following day when the indices decided to head southward amidst all round selling pressure. The profit booking exercise continued well into Wednesday and Thursday with no indications of the bear stampede coming to an end. Then, when the mood was that of utmost caution and bearishness, markets, once again, managed to surprise the markets, however, this time on the upside on Friday.

    Top 5 gainers over the week
    COMPANY Price on
    January 16 (Rs)
    Price on
    January 23 (Rs)
    %
    CHANGE
    52-WEEK
    H/L (Rs)
    BSE-SENSEX 5,946 5,817 -2.2% 6,250 / 2,904
    S&P CNX NIFTY 1,901 1,848 -2.8% 2,015 / 920
    CADILA HEALTHCARE 371 401 8.0% 422 / 115
    SSI LTD. 206 222 7.8% 235 / 54
    HCL TECH 307 325 5.9% 340 / 118
    SATYAM COMP 324 342 5.6% 391 / 127
    MOSER-BAER INDIA 332 349 5.0% 421 / 86

    Apart from the fact that profit-booking sentiments largely prevailed when the investors went in to trade at the start of the week, the bloodbath on the bourses during the week could also be attributed to the uncertainties regarding Participatory Notes (PN). Markets had feared that SEBI would ban the issue of PN, which could have a negative impact on the foreign money inflow as a significant amount of money is routed into the country through this medium. It must be noted that it was more of panic and fear of the above, which led to the unwinding of positions by retailers and domestic institutions in the cash as well as futures & options markets. This is because, Tuesday-through-Thursday, when the indices lost almost 8% in just 3 trading sessions, FIIs were net buyers of equities. This not only confirms the fact that FIIs are here to stay, it also re-affirms our stand that investors should take a long-term investment horizon so as to relatively insulate themselves from such intense intra-day market movements.

    Top 5 losers over the week
    COMPANY Price on
    January 16 (Rs)
    Price on
    January 23 (Rs)
    %
    CHANGE
    52-WEEK
    H/L (Rs)
    DSQ SOFTWARE 17 12 -26.6% 25 / 5
    TATA CHEMICALS 168 126 -24.7% 172 / 58
    HIND LEVER CHEM 365 285 -22.0% 379 / 142
    SHREE RAMA MULTI 12 9 -19.9% 17 / 4
    IND. RESORT 125 102 -18.2% 143 / 38

    However, Friday was the all-important day during the week on the back of two counts. First and foremost, the clarification by Securities and Exchange Board of India (SEBI) with regards to Participatory Notes gave the markets enough reason to cheer as the regulator allowed the issue of PN, albeit only to regulated entities. It must be mentioned here that while the markets did expect a clarification from the regulator on Friday, the same came only after market hours. However, it seems that market men had already anticipated SEBI's decision, the result of which was the 4% gains witnessed in the indices.

    The second important news was the raising of India's long-term foreign currency rating to investment grade from sub-investment or speculative grade by the global rating agency, Moody's Investors Services. The effect of this seems to have been witnessed amidst Friday's trade, as this development would attract more foreign investment in the capital markets and FDI. The upgrade would not only aid easier borrowing by India Inc., as it would improve the liquidity of foreign debt paper of Indian companies, but will also help middle-rung corporates to get finer rates in foreign loans. This would thus help corporate India to continue to reduce their average cost of borrowing and also keep a check on the domestic interest rates.

    While the current week was filled with important results of the likes of Tisco, Ashok Leyland, Hindalco, Ranbaxy, Reliance Energy, Grasim, Satyam, Maruti, Telco and Wipro, the following week promises to be not less exciting. Though the next week would, more likely than not, continue to remain volatile with the expiry of the F&O segment due on Thursday, the longer-term story continues to remain as promising as ever. Reforms, improving productivity and profitability of India Inc., lower interest rates, continuation of the infrastructure drive, improved ratings, huge forex reserves, etc. will all continue to be the driving force for the markets well into 2004. The only caveat here could be the upcoming elections, which could slow the reform process just in case the current government fails to come back to power. However still, as already mentioned above, invest for the long-term in order to relatively insulate yourself from the daily and weekly wild swings witnessed on the bourses. But, stick to fundamentally sound companies.

     

     

    Equitymaster requests your view! Post a comment on "Eventful week". Click here!

      
     

    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    Were You Lured By Mr Market's Bait? (The 5 Minute Wrapup)

    Aug 23, 2017

    Mr Market lured investors into believing they'd bitten into a crash. Did you take the bait?

    Deep State First (Vivek Kaul's Diary)

    Aug 23, 2017

    Nowhere was the darkness deeper than in the nation's capital. There, no light shone. No flicker of awareness...observation...learning...or reflection appeared.

    Why Hasn't Warren Buffett Rung the Bell Yet? (The 5 Minute Wrapup)

    Aug 22, 2017

    It's surprising Warren Buffett hasn't warned investors about the expensive stock market? Let us know why.

    Think Twice Before You Keep Money In A Savings Bank Account (Outside View)

    Aug 22, 2017

    Post demonetisation, a cut in bank savings deposits rates was in the offing.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE SENSEX


    Aug 23, 2017 (Close)

    MARKET STATS