Golden time for value hunters - Views on News from Equitymaster

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

  • MyStocks


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

Golden time for value hunters

Oct 14, 2000

In these testing times, the spate of quarterly results was expected to trigger a positive sentiment. That did not happen. Though both Infosys and Satyam quarterly results exceeded market expectations, the markets fell regardless. Taking a clue from the NASDAQ, the BSE Sensex hit a new 52-week low of 3,714 on Friday, a loss of more than 8% compared to previous week. Compared to its high of 6,151 in February this year, the Sensex has lost around 40% in the past eight months. Several factors have affected the sentiment of markets adversely. The fresh spurt in the international crude oil prices in view of renewed tensions in the Middle East, the slowdown of Index of Industrial Production (IIP) from a high of 11.8% in February to 4.8% in August 2000 and lower GDP growth rate of 5.8%. These factors are bound to have a negative impact on the topline growth of corporates. The latest example is HLL whose topline growth reported a mere 0.4% increase in the third quarter of FY01. Further, lower agriculture growth will hit FMCG companies targeting the rural markets. Two wheelers, textiles and cement manufacturers will also be affected. The impact of slow down will crystallise into the bottomline growth of these companies. Already, Gujarat Ambuja, India’s most efficient cement company has reported a whopping 50% decline in its quarterly profits.

Keeping this scenario in mind, FIIs and mutual funds do not seem to be in a hurry to buy stocks at lower levels. Infact FIIs have sold securities to the tune of Rs 1.5 bn in the previous week (Rs 3.2 bn upto October 14). Mutual funds were net sellers of Rs 1.7 bn (Rs 2 bn till date in October). The volumes in the markets also declined substantially. Global meltdown in new economy stocks and its impact on the domestic industry, drop in production of key industries like cement, steel and automobiles continue to worry the investors.

The slow down in the Indian industry and outflow of FIIs and mutual funds investment from the markets clearly indicates a weak undertone for the markets, at least for the time being. Even excellent results by software majors in the coming week could fail to spur the markets. In such a situation, investors would do well to adopt a wait and watch policy and accumulate blue chips at every decline.

Equitymaster requests your view! Post a comment on "Golden time for value hunters". Click here!


More Views on News

Top 5 Stocks Mutual Funds Bought and Sold in March 2021 (Sector Info)

Apr 16, 2021

A look at what India's top equity mutual funds bought and sold in March 2021.

Kotak India EQ Contra Fund: Eliminating Emotional Bias (Outside View)

Apr 16, 2021

PersonalFN's analysis on the features and performance of Kotak India EQ Contra Fund.

A Warning About Bubbles (Fast Profits Daily)

Apr 16, 2021

Those who don't learn from financial history are doomed to lose their money.

11x Bankruptcy to Bluechip Stock: A Rare India Revival Story (Profit Hunter)

Apr 16, 2021

There is no stopping this 11-bagger stock from significant upside.

Market Crash: Picture Abhi Baaki Hai? podcast (Views On News)

Apr 15, 2021

Rahul Shah on whether another big crash is likely and the ideal strategy to counter it.

More Views on News

Most Popular

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

4 Stocks to Make Your Portfolio Immune to the Second Covid Wave (Profit Hunter)

Apr 6, 2021

Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.

An India Revival Stock I'm Bullish On... (Profit Hunter)

Apr 9, 2021

This could take India to the position of 3rd largest economy.

Why Did the Market Crash on Monday? (Fast Profits Daily)

Apr 13, 2021

In this video, I'll you what I think is the real reason behind yesterday's market crash.

A Unique Sector for Short-Term Profits (Fast Profits Daily)

Apr 12, 2021

This ignored sector could deliver big short-term profits.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Apr 16, 2021 (Close)