X

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.
Anxiety grips global markets - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • May 25, 2002

    Anxiety grips global markets

    Gripped with anxiety and worries about terrorism, global markets remained depressed during the last week. US government’s admission that the bounce back in the economy may not be as strong as earlier anticipated added to the weakness.

    The revised US GDP growth number for the first three months of the year at 5.6% was only marginally lower than its earlier estimates of 5.8% growth. This represents the strongest ever growth reported by the economy in the last two years. However, participants realized that there was devil in the details as the consumer and business spending failed to match expectations.

    Europe’s biggest drug maker, GlaxoSmithkline (GSK) Plc shares hit a two year low on the last trading session after a US court quashed patents for its top selling anti-biotic, Augmentin, paving the way for generics. It was GSK’s second biggest selling drug last year with global annual sales of almost US$ 2 bn. However, the company is set to appeal against the ruling and would seek damages against generic players if it wins the case on appeal. Geneva, an affiliate of the Novartis is likely to be the first generic player to enter the market with the drug. However, Novartis AG shares also fell on Friday.

    Meanwhile, Berkshire Hathaway Inc, created ripples by announcing a placement of the first ever negative interest rate securities, raising US$ 400m. These securities are convertible and investors showed willingness to accept a loss now, in the hopes of buying Berkshire shares at a good price five years down the line. The company only recently announced that a strong surge in demand for insurance and tightening of supply post Sept’11 resulted in insurance and re-insurance rates soaring, after a decade of decline. Berkshire declared a 51% rise in net profits for the quarter ended Mar’02. Earnings per share were US$ 598 (Rs 29,900) for the quarter. Berkshire's Class A stock, which has not been split in Buffett's 37 years at the company’s helm, trades at $75,700 (Rs 3.8 m a share).

    Indian ADR’s: Roll coaster ride
    (Price in $) 18-May-02 25-May-02 Change
    Dr. Reddy's 21.3 21.9 2.8%
    MTNL 6.0 5.7 -5.0%
    Infosys 67.0 63.3 -5.5%
    HDFC Bank 15.3 15.1 -1.3%
    Wipro 35.0 32.8 -6.3%
    Satyam 10.8 10.9 0.9%
    Rediff 0.8 0.8 0.0%
    VSNL 7.7 7.6 -1.3%
    ICICI Bank 7.1 6.8 -4.2%
    Satyam Infoway 1.0 1.0 0.0%
    Silverline 1.7 1.7 0.0%

    It was roll coaster ride last week. The week began with extreme pessimism over fears of war on the India-Pak border. Investors dumped stocks in the beginning of the week on signals of war. However, stock prices registered a smart recovery on the last trading session as war fears receded. Markets reacted positively to a tone down in aggressiveness from both India and Pakistan, emanating from several statements given by both sides yesterday.

    With emerging pressure from countries across the globe, nerves seemed calming down. Moreover, the undertone of the PM's speech gave a feeling that the country was not interested in aggravating tensions unless the situation worsens. The derived interpretation of this could be that the military build up is more of a precautionary measure rather than a full-fledged war preparation. Markets seem to be re-considering the war risk premium. The bounce back in equities on the last trading day was not only in index heavyweights but also in the broader market.

    Indian ADR’s moved inline with market sentiment. The highlight for the week was Satyam Computers, which remained heavily volatile during the week. Markets are expecting the company to divest its loss making subsidiary ‘Sify’ soon. Dr. Reddy’s ADR was the top gainer during the week. The company’s anti-diabetic molecule is in the last stage of clinical trials.

    Red all around
    Indices 18-May-02 25-May-02 Change
    Nikkei 11,847 11,976 1.1%
    BSE 3,334 3,256 -2.3%
    FTSE 5,218 5,169 -0.9%
    Dow 10,353 10,104 -2.4%
    Hang Seng 11,975 11,627 -2.9%
    Dax 5,036 4,899 -2.7%
    NASDAQ 1,741 1,661 -4.6%

    Though slow, the expectation of recovery in the US is gaining ground. As far as India is concerned, the situation with Pakistan is likely to have a greater influence on the movement of the indices in the near term.

     

     

    Equitymaster requests your view! Post a comment on "Anxiety grips global markets ". 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.

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process) (The 5 Minute Wrapup)

    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.

    Which Gods Will Bring Down the US Empire? (Vivek Kaul's Diary)

    Aug 17, 2017

    Mr Trump is in the White House and the gods are in their heavens; what's not to like?

    Will They Haul Off Trump's Statue, Too? (Vivek Kaul's Diary)

    Aug 16, 2017

    All across the country, the old gods become devils. New, gluten-free gods take their places...

    This Company Beat the Business World's 'Three Killer Cs' (The 5 Minute Wrapup)

    Aug 16, 2017

    And what it has in common with beating the stock market too.

    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.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    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...

    More
    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

    S&P BSE SENSEX


    Aug 17, 2017 03:37 PM

    MARKET STATS