Global markets: Volatile! - Views on News from Equitymaster

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

  • MyStocks

MEMBER'S LOGINX

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

Global markets: Volatile!

Sep 27, 2003

US markets were mired in volatility and closed the week in the negative. While the Dow was down 3%, the NASDAQ lost about 6%. The week started on a negative note on account of concerns regarding the depreciation of the dollar against the Yen. Also, profit booking in technology stocks added to further losses.On Tuesday, the indices gained ground on account of positive news from corporate America. Cisco Systems announced that its board has approved up to US$ 7 bn of stock buyback apart from the previous approval of a buyback of US$ 13 bn. Buyback announcements usually indicate promotersí confidence in the business, thus leading to increased optimism. Also positive news from Sun Microsystems further aided confidence towards technology stocks.

However, the markets witnessed a sharp decline on Wednesday on account of a surprise cut in production announced by OPEC in an attempt to bring crude prices to their favourable range. This was bad news as the US is one of the largest importers of crude oil and this increase is likely to hamper the expected US economic recovery.

On Thursday, the markets continued to witness selling pressure and lost further ground. Positive news regarding unemployment numbers and robust housing segment failed to enthuse investors. Durable goods order reported a surprise drop in the month of August. In corporate news, Eastman Kodak announced a cut in the dividend by about 70% and also said that it would shift its focus towards digital photography and ink-jet printers. Markets continue to witness selling pressure on Friday also on account of news regarding decline in consumer sentiment. However on the positive side, the GDP figures for the second quarter were revised upwards from the earlier 3.1% to 3.3%.

(Price in US $)20-Sep-0327-Sep-03Change
ICICI Bank9.510.610.9%
MTNL4.95.26.4%
VSNL5.15.22.2%
Wipro28.929.41.5%
HDFC Bank21.021.20.8%
Silverline1.11.10.0%
Rediff6.06.0-1.3%
Infosys69.267.8-2.0%
Satyam13.112.7-3.4%
Dr. Reddy's24.222.8-5.6%
Satyam Infoway7.16.1-14.3%

Indian ADRs were a mixed bag during the week. Top gainers included ICICI Bank (11%), MTNL (6%) and VSNL (2%). ICICI Bank has more or less done the restructuring exercise after becoming a universal bank and has increased its incremental market share in the retail segment. Its focus towards the retail side has increased and has also improved its margins. Going forward, it is likely to be one of the biggest beneficiaries of the Securitisation Act. Software ADRs witnessed profit booking during the week. While Infosys lost 2%, Satyam was down 3%.

Indices20-Sep-0327-Sep-03Change
BSE4,2174,3833.9%
Hang Seng10,96811,2902.9%
FTSE4,2574,157-2.3%
Dow9,6459,313-3.4%
Nikkei10,93810,318-5.7%
NASDAQ1,9061,792-6.0%
Dax3,5793,325-7.1%

Barring Sensex and Hang Seng, globally the indices were in the red. The NASDAQ (the US), the Nikkei (Japan) and the Dax (Germany) were the top losers with declines of 6%, 6% and 7%, respectively. OPECís decision to cut production led to an increase in crude oil prices. This raised the concerns for companies like BASF and Bayer who are likely to be the most affected by this increase in crude oil prices as this is their major raw material. Also, declining dollar led to concerns for companies like Phillips, whose exports come mainly from the US markets. This led to the decline in indices in the Europe.

While the US markets witnessed a surge in the index levels in the past few months, this week however witnessed a reversal in the trend. The indices have surged largely on the back of increased optimism towards recovery in the US economy. However still, the economic reports that have come in the last few months have shown mixed sentiments.

Read: Dr. Marc Faberís view on global markets


Equitymaster requests your view! Post a comment on "Global markets: Volatile!". Click here!

  

More Views on News

How Much Money Should an Investor Set Aside for Trading? (Fast Profits Daily)

Sep 21, 2020

In this video, I'll give you a simple equation which you can use to decide how much money you can set aside for trading.

Kotak Standard Multicap Fund: Strategizing Growth with Focused Approach (Outside View)

Sep 21, 2020

PersonalFN's analysis on the features and performance of Kotak Standard Multicap Fund.

Sensex Can Go to 25,000 Before it Goes to 60,000. Are You Prepared? (Profit Hunter)

Sep 21, 2020

Am I expecting a big crack in the Sensex and what next?

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

Sundaram Bluechip Fund: Will Hold the Stable Horses (Outside View)

Sep 18, 2020

PersonalFn briefly outlines the newly launched NFO note HSBC Corporate Bond Fund.

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

Why am I Recommending Caution? (Fast Profits Daily)

Sep 9, 2020

This is why I have changed my short-term view on the market.

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Sep 21, 2020 03:35 PM

MARKET STATS