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.
Volatile week! - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jun 30, 2007

    Volatile week!

    After the strength displayed on the bourses last week, the benchmark indices managed to close this week on strong note despite the volatile movements witnessed during the larger part of the week. For the week ended June 29, 2007, while the BSE-Sensex closed 1% higher, the NSE-Nifty gained 2%. Also, both smallcaps and midcaps were on the investors' radar as the BSE Small Cap and the BSE Mid Cap closed higher by 3% and 2% respectively.

    Volatility characterised the trading session this week, as the bulls and the bears played tug-of-war. While the bulls seemed adamant to prevent any fall in the markets, the bears pressed the 'sell' button every time the indices notched gains and this trend was witnessed for the larger part of the week. Monday's session began on a jittery note and while the indices scaled higher during the earlier part of the day, profit booking ensued in the later hours dragging the indices into the red, before the bulls once gain regained control. While the bulls had the upper hand on Tuesday, the bears took the center stage on Wednesday. Both Thursday and Friday saw the indices trade into the positive. However, while on Thursday the movement of the indices was restricted within a range, Friday saw the indices gain momentum to close the week on a firm footing.

    Key indices over the week
    Index As on
    June 22
    As on
    June 29
    % Change
    BSE SMLCAP 7,513 7,730 2.9%
    BSE MIDCAP 6,374 6,527 2.4%
    BSE BANKEX 7,835 8,010 2.2%
    BSE PSU 6,720 6,802 1.2%
    BSE FMCG 1,818 1,829 0.6%
    BSE OIL AND GAS 7,594 7,627 0.4%
    BSE IT 4,858 4,871 0.3%
    BSE HEALTHCARE 3,824 3,806 -0.5%
    BSE METAL 10,745 10,605 -1.3%
    BSE AUTO 4,805 4,740 -1.4%

    On the sectoral indices front, aided by rise in heavyweights like HDFC and SBI, the BSE Bankex once again emerged as the top gainer, ending the week 2% up. On the other hand, weakness in Tata Motors, Maruti and Bajaj Auto led the auto index to emerge as the worst performer for the week with losses of 1.4%.

    Let us now have a look at some of the important sector/stock specific news during the week.

    Banking stocks closed mixed during the week. While OBC (up 6%), SBI (5%), HDFC Bank (4%) and Bank of Baroda (2%) found favour, UTI Bank closed 2% lower. Besides planning a follow-on public offer for raising capital and forming a holding company for its subsidiaries, the largest bank in the country, SBI, has also decided to increase the equated monthly instalments (EMIs) on floating rate home loans for the first time after it raised interest rates over the past one year. Even though the bank expects the decision to result in higher defaults (NPAs), it is planning to increase the EMIs by around 10%. The bank had hitherto resorted to prolonging the repayment tenure by up to 25 years as the interest rates on housing loans went up by 2% over the last year The bank's housing loans portfolio (grew by 18% in FY07) accounted for 51.6% of its retail advances in FY07. The possibility of higher delinquency thus evinces higher provisioning, which along with the AS-15 provisioning are expected to weigh heavy on the bank's bottomline this fiscal.

    Top gainers during the week (BSE-A)

    Company Price on
    June 22 (Rs)
    Price on
    June 29 (Rs)
    % Change 52-Week
    H/L (Rs)
    BSE SENSEX 14,467 14,651 1.3% 14,724 / 9,875
    CNX NIFTY 4,252 4,318 1.6% 4,363 / 2,878
    ABB 946 1,095 15.8% 1,099 / 449
    TITAN INDUSTRIES 1,177 1,339 13.8% 1,365 / 537
    ADANI EXPORT 243 274 13.0% 282 / 102
    INDUSIND BANK 48 54 12.7% 63 / 30
    SUPREME INDUSTRIES 209 233 11.4% 245 / 132

    As per a leading business daily, Satyam has bagged a three-year contract extension from food and beverage company Nestle Corporation. Satyam is working with Nestle to establish global business practices based on a common technology platform, wherein it would provide services such software development, maintenance and infrastructure management. As a result of this agreement, the number of the company consultants working for Nestle is expected to grow close to 500 over the next year. Satyam has entered into many strategic alliances in the recent past and these will help the company in improving its operating margins. Its alliances with Northrop Grumman, 7hills, Temenos and Hawker Beechcraft are expected to be a major revenue booster in the future. Satyam closed 1% higher during the week. Its peers Mphasis (up 6%), HCL tech (4%), TCS (1%) and Wipro (up marginally) also closed firm.

    Top losers during the week (BSE-A)

    Company Price on
    June 22 (Rs)
    Price on
    June 29 (Rs)
    % Change 52-Week
    H/L (Rs)
    PUNJAB TRACTORS 298 273 -8.2% 359 / 198
    MICO 4,785 4,482 -6.3% 4,830 / 2,500
    TVS MOTOR 65 61 -5.9% 130 / 53
    HINDALCO 170 160 -5.8% 193 / 125
    FINOLEX INDUSTRIES 86 81 -5.8% 103 / 65

    Auto stocks closed lower during the week with Maruti (down 3%), Tata Motors and Bajaj Auto (each 2% down) featuring among the key losers. TVS Motor announced relatively subdued results for the fourth quarter and full year ended 31st March 2007. While the total income rose by 10% in 4QFY07 when compared with 4QFY06, the net profits declined by 69% during the same period. On YoY basis while the total income rose by 19%, the net profits dipped by 43%. While the profits may have taken a hit, the company has delivered on the topline and the volumes front. Infact, the company achieved its best ever turnover in FY07. The 19% YoY growth in topline was powered by the 14% growth in total volumes. This growth was higher than the two-wheeler industry growth rate of 12%, thus enabling the company to improve its market share. Motorcycles, the main contributor to volumes witnessed growth of nearly 15% YoY, which was in line with the industry growth rate. TVS Motor closed lower by 6% during the week.

    Going forward, while the progress of the monsoons will be critical in backing the India growth story, the announcement of the June quarter results next month is also likely to determine which way the markets move next. Having said that, we reiterate our view that investors not get swayed away by the volatility in the markets and infact adopt a disciplined approach while investing in equities. Any dip in the markets can be looked upon as an opportunity to invest in good fundamentally strong companies, which will report good results even during difficult times and thus ensure strong returns to shareholders in the long term.



    Equitymaster requests your view! Post a comment on "Volatile week!". 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.

    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.

    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.

    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)