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.
Interest rate concerns cloud sentiment - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Mar 23, 2002

    Interest rate concerns cloud sentiment

    The rally in the US market came to a halt this week as concerns over rise in interest rates outweighed bullishness in economic turnaround. Though the Fed meeting last week kept the interest rate untouched, it indicated a possibility of rise in interest rates. Rising crude prices added to the concerns. For the Dow it was the first losing week after ending in positive for five consecutive rises.

    The airlines industry, which was dumped by investors post September, seems to be receiving new lease of life. While air reservations are surging, aircraft maker Boeing fuelled optimism over expectation of US$ 9.7 bn defense orders. However, rising crude oil prices acted as a dampener for airline stocks.

    Moody’s downgrade for Lucent added concerns over recovery in the telecom industry. Lucent had earlier indicated that it expects to make profits only in fiscal 2003. McDonalds and Nike were amongst the other majors to issue profit warning during the week.

    Meanwhile, economic data continued to be positive with both jobless claims reducing and consumer index inching higher. Retail sales were however, slack with a marginal rise of 0.3% in February, much below 0.9% forecasted by economists.

    Rediff beats the trend
    (Price in $) 15-Mar-02 22-Mar-02 Change
    MTNL 6.3 6.0 -4.0%
    Silverline 2.5 2.2 -12.0%
    VSNL 7.1 7.1 0.7%
    Satyam Infoway 1.7 1.6 -5.3%
    ICICI 8.0 7.9 -1.3%
    Dr. Reddy's 22.0 21.7 -1.4%
    Satyam 13.2 12.6 -4.2%
    Wipro 39.8 38.5 -3.4%
    ICICI Bank 6.2 6.2 0.2%
    HDFC Bank 15.7 15.7 0.2%
    Infosys 64.6 64.9 0.5%
    Rediff 1.2 1.2 3.4%

    Indian ADR’s, particularly technology stocks, were on the receiving end mirroring the general trend on the NASDAQ. Silverline, Satyam and Wipro were the biggest losers. However, Rediff was the sole gainer during the week with a 3.4% rise. Last week the company forecasted an upbeat financial outlook for the March quarter. Rediff is expecting operating loss in the range of US$ 0.7 m – US$ 0.8 m for the March quarter, lower than US$ 1.6 m posted in the December quarter.

    In a major telecom breakthrough, the Indian government deregulated Internet telephony starting April’02 as per its schedule. Even after a 50% reduction in tariffs last year, international telephony rates are relatively higher in India. Internet telephony is thus expected to prove detrimental to VSNL’s revenues. Meanwhile Bharti, the biggest competitor for VSNL, has slashed international telephony rates by almost 50%. VSNL’s ADR ended flat during the week.

    Global markets, cash in profits
    Indices 15-Mar-02 22-Mar-02 Change
    Dax 5,401 5,366 -0.6%
    Dow 10,607 10,428 -1.7%
    FTSE 5,293 5,251 -0.8%
    Hang Sang 11,210 10,863 -3.1%
    BSE 3,618 3,516 -2.8%
    Nikkei 11,648 11,345 -2.6%
    NASDAQ 1,868 1,851 -0.9%

    The markets globally took a breather after having run up sharply in the last fortnight. Even though, the US economy is showing signs of a turnaround, business activity is likely to rise gradually. In the short term, crude oil prices, interest rate movements and outlook from companies would drive market sentiment.



    Equitymaster requests your view! Post a comment on "Interest rate concerns cloud sentiment ". 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.

    You've Heard of Timeless Books... Ever Heard of Timeless Stocks? (The 5 Minute Wrapup)

    Aug 19, 2017

    Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.

    Why NOW Is the WORST Time for Index Investing (The 5 Minute Wrapup)

    Aug 18, 2017

    Buying the index now will hardly help make money in stocks even in ten years.

    Trump Takes a Beating (Vivek Kaul's Diary)

    Aug 18, 2017

    Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.

    How To Read Your Mutual Fund Account Statement Correctly (Outside View)

    Aug 17, 2017

    PersonalFN simplifies the mutual fund account statement for you.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    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.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    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.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    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 18, 2017 (Close)