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.
Mood darkens on D Street - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Feb 21, 2009

    Mood darkens on D Street

    The Indian markets began their losing streak right from the first day of the week itself. It began with a negative reaction to the interim budget presented on Monday, and continued right through the rest of the week. The benchmark index, the BSE Sensex lost 8.2% during the week, and incidentally turned out to be the worst performer amongst its Asian peers. Chinese markets too lost about 2.6% but relatively that was the best performance in the Asian region.

    Germany was the worst performer amongst the global markets with a loss of 9% for the week. That was followed by France and UK which lost 8.2% and 7.2% respectively. The Dow Jones index lost 6.2% during the week. It may be noted that the Dow Jones slumped to its 6-year low on Friday. The low of the last bear market was in October 9, 2002. November 2008 seemed to be the lowest point in financial markets as the panic around the sector’s turmoil was at its peak then. But that does not seem to be the case as the US government’s bailout package has succeeded little in cheering investors.

    The fact that the markets were disappointed with the interim budget presented by Mr Pranab Mukherjee was very evident during the week. The budget projected the Indian economy to grow at 7.1% this fiscal. The revenue deficit is seen at 4% (up from estimated 1.1%) and fiscal deficit at 5.5% (higher from the estimated 2.5%). The government raised the allocation for defence to Rs 1,417 bn. Also Mr Mukherjee made note of the fact that despite the severe global financial crisis, India recorded a 45% YoY growth in foreign direct investment (FDI) between April and December 2008, receiving an FDI inflow of US$ 23.3 bn during the period. This even though during FY08, India's FDI inflow was already a robust US$ 32.4 bn.

    Inflation numbers for the week ending February 7 stood at 3.9%. This incidentally was the lowest number in the past 14 months. The numbers during the week dropped on account of lower prices of manufactured items. With the wholesale price index (WPI) touching the comfort levels of the RBI, the odds are high that the RBI may now consider cutting the key policy rates.

    The week saw some progress on the issue of 3G spectrum allocations as well. As per a leading business daily, the government is looking to set up a committee called the GoM (Group of Ministers), which will help in sorting out the 3G issues. These include issues such as the number of slots and reserve price for the 3G services. The GoM was likely to be constituted by the end of this week. According to the telecom minister, the government is looking to sort out the spectrum options possibly before the end of this fiscal.

    Todays market: Performance of world market Todays market: Performance of asian market
    Source: Yahoo Finance Source: Yahoo Finance

    Todays market: Net Fund Flows (India) Todays market: Sensex during the week
    Source: SEBI Source: BSE

    Todays market: Key BSE indices - Top 5 Todays market: Key BSE indices - Bottom 5
    Source: BSE Source: BSE

    Movers and shakers during the week
    Company 13-Feb-09 20-Feb-09 Change 52-wk High/Low Change from 52-wk High
    Top gainers during the week (BSE-A Group)
    Tech Mahindra 248 270 8.6% 961 /204 -71.9%
    Colgate 433 457 5.5% 469 / 341 -2.5%
    Alstom Projects 286 301 5.2% 760 / 191 -60.4%
    Bajaj Auto 477 500 4.8% 0 / 0 NA
    Baja Holding & Invst. 240 247 3.3% 1,100 / 210 -77.5%
    Top losers during the week (BSE-A Group)
    ICICI Bank 434 336 -22.7% 1,202 / 282 -72.1%
    Aban Offshore 456 360 -21.0% 4,190 /357 -91.4%
    Pantaloon 178 145 -18.7% 575 /141 -74.8%
    RCF 40 33 -17.9% 90 / 25 -63.6%
    United Sprits 688 568 -17.5% 1,846 / 426 -69.2%
    Source: Equitymaster

    Experts around the world continued to explicitly express their skepticism regarding the US’s attempts to boost its economy. The Japanese too have said it. The IMF chief also joined the long list of people who believe that perhaps not enough is being done by the US to restore confidence back into the economy. In an interview to French radio, IMF’s Managing Director, Dominique Strauss-Kahn made it clear in no uncertain terms that ridding the banks’ balance sheets of toxic assets should be the utmost priority of the governments. And unless that is done, trust cannot come back.

    He was also critical of the policy of launching both fiscal as well as monetary stimuli simultaneously since without free flowing credit, fiscal stimulus will not make a lot of sense. Furthermore, spending money on fiscal stimulus would mean that the governments have less money to spend on monetary stimulus. The end result would most likely turn out to be half baked outcomes that will only prolong the current economic slump.

    In line with the uncertain investing environment in other asset classes, gold closed at about US$ 973 per ounce, higher by 3.2%. Indian gold prices moved closer to a high of Rs 16,000 per 10 grams. Crude oil rose 3.3% during the week to close at about US$ 39 per barrel.

     

     

    Equitymaster requests your view! Post a comment on "Mood darkens on D Street". 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.

    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.

    A Darkness Is Spreading Across the US (Vivek Kaul's Diary)

    Aug 22, 2017

    Today, we are attacked by one preposterous thing after another, each of them even more absurd than the last.

    Dear PM Modi, India is Already Land of Self-Employed, and It Ain't Working (Vivek Kaul's Diary)

    Aug 21, 2017

    Most Indians who cannot find jobs, look at becoming self-employed.

    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.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    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 09:48 AM

    MARKET STATS