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.
War brings cheer - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Mar 22, 2003

    War brings cheer

    ”The markets can remain irrational longer than you can remain solved” said John Maynard Keynes. Irrationality of the bourses was once again of the forefront the US bourses closed with gains of 8.6% and 6% during the week that the US attacked Iraq. Infact the Dow posted its best performance since November 1996. The explanation is investors are happy bout uncertainty regarding the war ending and are expecting the conflict to end quickly. While this is a likely outcome, war is not exactly the time to choose equities as an investment option.

    On Monday, the Dow closed with gains of 272 points (3.8%) as war seemed imminent. The Nasdaq was up 3.5%. Interestingly, technology stocks gained on hopes of a turnaround in the technology sector. On Monday night President Bush, gave Mr. Hussein 48 hours to leave Iraq. Tuesday saw markets continuing to rise, thanks to America belligerent stand.

    Infact the geopolitical concerns weighed so heavily on the minds of the investors that the markets barely reacted to the Federal Reserve meeting on Tuesday. The Fed observed that prospects of the US economy continued to be uncertain. Post the meeting the markets are speculating on the possibility of a rate cut. This could take place before the next Fed meeting. Oracle’s earnings came in better than expected on Tuesday. However, the sluggish sales outlook given by the company concerned the markets. On Wednesday too the Dow gained. However, the Nasdaq closed marginally in the red. The markets gained on Thursday even as the US-Iraq conflict became a reality. And on Friday, the Dow jumped by 235 points on the back it significant advance made by the allied forces.

    Technology leading the way
    (Price in US $) 15-Mar-03 22-Mar-03 Change
    Satyam Infoway 3.4 3.7 7.6%
    ICICI Bank 6.7 6.7 1.0%
    Dr. Reddy's 18.3 19.3 5.8%
    Wipro 28.4 31.5 11.1%
    VSNL 3.3 3.3 -0.6%
    MTNL 4.2 4.1 -1.2%
    Infosys 58.5 67.2 14.8%
    Rediff 2.1 2.3 10.0%
    HDFC Bank 15.2 15.7 3.3%
    Satyam 9.5 9.9 4.6%
    Silverline 0.4 1.8 386.5%

    Among the Indian ADR’s, those from the technology sector topped the list of gainers. The markets were concerned by business flow to IT services companies being hurt in wake of a long draw war. However, with significant gains already made by the allied forces it seems unlikely that he conflict will have a sizable impact of on the earnings of the Indian IT services companies. Also, these stocks had taken a beating in the recent past. Therefore, on the back of fears allayed and attractive valuations technology stocks surged ahead. Only the ADR’s from the telecom sector closed in the red for the week. The intense competition, which has led to realisations plummeting, could be driving the negative outlook towards telecom stocks.

    Indices 15-Mar-03 22-Mar-03 Change
    FTSE 3,602 3,861 7.2%
    Nikkei 8,003 8,003 0.0%
    BSE 3,108 3,218 3.5%
    Hang Seng 8,956 9,179 2.5%
    NASDAQ 1,340 1,422 6.1%
    Dow 7,860 8,522 8.4%
    Dax 2,403 2,715 13.0%

    The European markets were the most prominent gainers during the week. Investors were back buying equities on expectations of short war. However, considering the dangers involved, it might be a bumpy ride ahead for the bourses ahead.



    Equitymaster requests your view! Post a comment on "War brings cheer". 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

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    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!

    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


    Aug 22, 2017 (Close)