Spring's here lets see some cheer… - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Spring's here lets see some cheer…

Mar 24, 2001

The markets saw another week of decline as uncertainties arising from the exchange payment crisis, political turmoil and weakness on the U.S bourses all bore down on the indices. This is the sixth consecutive week that the two benchmark indices, BSE and NSE, have fallen. The sell off that started in the week after the budget has not seen a let up, as a constant flow of negative news has kept sentiments depressed. In the current week, the continuing political squabbles, investigations on exchange officials, I.T raids on top brokers, run on Gujarat banks, bankruptcy of brokers and finally the Fed failing to meet interest rate cut expectations weighed down on the markets.

Technology stocks continued to get battered for the better part of the week. A big dampner for technology and the markets was the profit warning by VisualSoft Technologies. The company has stated that it will record a negative sequential earnings growth. However, year on year, earnings are expected to increase by 90%. This is the fourth profit warning by a major Indian Technology house. The earlier victims of the tech slowdown include Geometric Software, Mastek and NIIT. A lesser-known software company, KPIT Systems, has also issued a warning. The company has claimed that the slowdown in the U.S economy has adversely impacted revenues.

The warnings could validate the theory of a U.S economic slowdown impacting the income statement of Indian software companies. Nevertheless, investors need to show prudence as companies failing to meet targets could make the faltering U.S economy a scapegoat. One cross check could be the geographical revenue break up of a company.

Stand-alone refineries heated up considerably, as the BPCL board approved the acquisition of the Government's stake in Koch Refineries (KRL). The Government holding is being acquired at a considerable premium to the market price, which triggered off the buying spree. However, these counters have seen a sharp slide as although BPCL and IOC will be acquiring the stand-alone refineries they are not required to make an open offer. The argument put forward is that the transfer of shareholding does not result in a change in management. Hence, does not warrant an open offer. Also, with OPEC cutting crude oil production, markets remain uncertain about oil price movements, which could firm up adversely affecting the global economy. The Pharma sector was amongst the key loser towards the end of the week as news flowed in that the much-awaited price decontrol legislation is not expected to come through in the current fiscal.

March has not been a cheerful month for the bourses. There has been a string of bad news that has kept sentiments subdued. Although the markets have discounted this news they continue to remain fragile. Any further negative events could see the indices touch new lows. The current valuations could also see some bargain buying. But for volumes to gain strength again the confidence will have to be rebuilt. Lets hope fortunes change with the start of a new month.

Equitymaster requests your view! Post a comment on "Spring's here lets see some cheer… ". Click here!


More Views on News

Top 5 Recent IPO Developments You Should Know (Views On News)

May 12, 2021

So far in 2021, IPOs in India have raised nearly US$ 3 bn, the best start to the year since 2018.

How Did Mindtree Perform in Q4FY21? (Company Info)

Apr 20, 2021

Here's the rundown on the company's latest quarterly results.

Parag Parikh Conservative Hybrid Fund: Should You Invest in Higher Debt Allocation? (Outside View)

May 14, 2021

PersonalFN analyses the features of Parag Parikh Conservative Hybrid Fund and explains the potential this fund has to offer to its investors.

Die Hard 4.0 Redux? (Fast Profits Daily)

May 14, 2021

A Hollywood style cyber-attack has caused shockwaves across financial markets.

What Godrej Consumer's 22% Single-Day Gain Tells About My Blueprint (Profit Hunter)

May 14, 2021

The company's FY21 earnings performance turned out better than my estimates but...

More Views on News

Most Popular

My Secret to Find Breakthrough Stocks (Fast Profits Daily)

May 7, 2021

I've used this trading technique for many years with great success. I'm sharing it with you today.

Are the Stock Markets Deaf to Covid Agony? (Profit Hunter)

May 6, 2021

Why are markets discounting the economic impact of Covid?

The Worst Sector in the Market (Fast Profits Daily)

May 11, 2021

The worst sector in the stock market according to the charts.

The Key to Profit from India's EV Revolution (Profit Hunter)

May 7, 2021

Stocks you must consider investing in before buying your first electric vehicle.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


May 14, 2021 (Close)