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NASDAQ nightmares continue.... - Views on News from Equitymaster
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  • Apr 7, 2001

    NASDAQ nightmares continue....

    As was expected, the opening last Monday was very weak as the markets digested the news of the latest stock market scam that broke-out over the weekend. Within an hour the benchmark indices touched their new 52-week lows. The rest of the week was a roller coaster ride. This is the eight consecutive week that the markets have declined.

            BSE Sensex        
    Week ended % decline
    9-Mar-01 -5.2%
    16-Mar-01 -3.5%
    23-Mar-01 -2.9%
    30-Mar-01 -0.9%
    7-Apr-01 -0.8%
    Over the last two months the Sensex has fallen by 18.7%. However, over the last five weeks the percentage decline in the markets has been reducing. This could indicate that the bottom is near. In the current week the BSE Sensex and NSE Nifty declined by 0.8% and 0.7% respectively.

    With the absence of any domestic drivers the markets were cued on to the NASDAQ. Consequently, it has been a roller coaster ride as U.S participants try and figure out whether or not they are headed into a recession and have the markets bottomed out. The never-ending profit-warning season continued on the U.S bourses. This time around Alcatel and Ariba announced lower earnings guidance for the quarter at the beginning of the week, which led to a sharp fall on the U.S bourses. The weak sentiments got reflected on the domestic bourses leading to a sell-off on Wednesday. Tech got trounced once again in the melee. In Thursday's trading the U.S markets ricocheted from their lows, as Dell Computers announced that it would meet the current quarter earnings target. Further, Alcoa beat first quarter earning estimates. The turn around in sentiments led to a strong domestic opening on Friday. But the gains were constantly eaten into as the day progressed and finally the markets closed in the red. The Indian markets, displaying efficiency, seem to have discounted the S&P and NASDAQ futures, which were down prior to the U.S markets opening.

    If the drop on the U.S bourses has already been discounted one can expect a fresh, non-bias, opening on Monday. The coming week will see result announcements from the tech pivotals, Satyam Computers (April 10) and Infosys Technologies (April 11). These and the forth-coming results could prove to be significant drivers for the market. More importantly, though, the announcements by the managements regarding the prospects in the coming year could prove to be the key trigger. With U.S and Japan heading towards a recession and the global economy in threat of a slow down the outlook, if one hazards a guess, does not look very encouraging.

    As we head into the result days we could see a build up in speculative positions, which could shore up these counters. Otherwise the absence of triggers in the first half of the week could result in range bound markets.



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    Aug 22, 2017 11:31 AM