Apr 26, 2003|
Results fail to enthuse
This week’s performance was nothing to cheer about for the investors. Barring the opening day of the week, the indices closed in the negative on all other trading days. The BSE Sensex lost 2% while the Nifty lost 1.7% during the week. It must be noted here that it was the third consecutive week of losses for the Indian indices. During this period, the Sensex has lost 7.7% while the Nifty has lost 9.1%. The weakness in the indices only confirms the fact that the results season has not gone down well with the investors.
On Monday, indices opened on a strong note after witnessing considerable weakness in the previous two weeks. Disappointing results and lower guidance from tech majors made the investors shift their focus towards old economy stocks. The indices managed to close in the black primarily on the back of buying witnessed in index heavyweights, Reliance and HLL. The former witnessed buying on expectations of good quarterly and full year FY03 numbers. Also, barring Infosys, buying was witnessed in other battered technology stocks.
Apr 18 (Rs)
Apr 25 (Rs)
||3,478 / 2,828
|S&P CNX NFTY
||1,137 / 920
||315 / 93
||104 / 64
||149 / 72
||115 / 49
||190 / 55
However, that was the end of the short upmove as the indices continued to lose ground every trading day from thereon. But this time, the spoilsports were the old economy stocks. Good results from Reliance and ‘better than Infosys’ guidance from tech major Satyam Computers, also failed to perk up overall investor sentiment. Though Satyam’s outlook managed to attract some buying for the technology stocks.
Apr 18 (Rs)
Apr 25 (Rs)
|BANK OF BARODA
||98 / 44
||41 / 14
||394 / 289
||330 / 167
||87 / 24
Just to recap the Reliance numbers, the company’s topline increased by 9% in FY03 over the previous year while it managed to shore up its bottomline by a healthy 27% YoY. This is particularly commendable in the backdrop of the fact that the company has acquired two companies (IPCL and BSES) and merged its operations with Reliance Petroleum. Moreover, the company was able to tide over factors like a downbeat economy and rise in crude prices, which led to an escalation of feedstock and key raw material prices. But the 4QFY03 numbers indicated a slowdown, both in topline, as well as a shrinking of operating margins. Satyam Computers, on the other hand, posted a 17% topline growth and a 31% fall in bottomline, which was primarily due to a one-time write-off of investments in its subsidiaries. However, it gave a guidance of 9% growth for FY04 (not accounting for the extraordinary items).
Among others, PSU stocks were particularly out of favour. PSU banking stocks turned out of favour on the back of the government failing to take a decision on raising the FDI caps in various sectors including PSU banking stocks. It must be noted here that an expectation of a raise in FDI limits was also one of the reasons for the buoyancy being witnessed in PSU banking stocks. Among other PSU losers, HPCL (8%) and BPCL (2%) lost ground as concerns propped up as regards their divestment. Uproar in the Lok Sabha against divesting profit-making PSUs took center stage, which could prove to be a hurdle going forward for the smooth transition of the divestment process and, economic reforms on a broader perspective.
Going into the next week, results again could play a vital role for the markets. Moreover, the impact of SARS is already becoming a major concern the world over. China has reported the maximum detections and deaths related to SARS. It must be kept in mind that China, with a growth rate of nearly 8%, has a major role to play in the development and growth of world trade, and Asia in particular. Travel advisory warnings could have a negative impact on world trade, which could slow down the already lackluster world economies. One of the biggest concerns on the domestic front could be the monsoons role. As the MET department has already projected a below normal monsoon, domestic economic growth could take a hit in FY04.
More Views on News
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.
Aug 24, 2017
Kelly, Mattis, McMaster, Cohn, and Mnuchin are in charge. But these Pentagon bureaucrats and Wall Street hustlers may be worse than a loose-cannon president.
Aug 23, 2017
Mr Market lured investors into believing they'd bitten into a crash. Did you take the bait?
Aug 23, 2017
Nowhere was the darkness deeper than in the nation's capital. There, no light shone. No flicker of awareness...observation...learning...or reflection appeared.
Aug 22, 2017
It's surprising Warren Buffett hasn't warned investors about the expensive stock market? Let us know why.
More Views on News
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.
Aug 21, 2017
Most Indians who cannot find jobs, look at becoming self-employed.
Aug 16, 2017
The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?
Aug 16, 2017
Ensure your financial Independence, and pledge to start the journey towards financial freedom today!
Aug 22, 2017
Post demonetisation, a cut in bank savings deposits rates was in the offing.
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: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407