Slowdown or no, blue chips grow - 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?  

Slowdown or no, blue chips grow

Oct 20, 2001

Conventional warfare or bio-terrorism, it seems, whatever be the case, markets have made up their mind to climb higher. Though giving some credit where it is due the earning season, insofar, has unfolded pleasantly. A rising U.S market further supports the optimism. This is despite corporate America bleeding incessantly. Over the past month the markets washed away a large portion of the losses incurred post September 11. Currently, the BSE Sensex is only 4.2% below pre-WTC strike levels. For the record, this has been the fourth consecutive week the markets have moved higher registering an aggregate gain of 16%. Technically, markets are looking to test pre-strike resistance levels (3,150 levels).

As believed, over the past week, the market climb was gentler compared to the previous week, which registered a steep incline of more than 5% on the back of strong results from Infosys. This week too the results story had a happy ending. Investors had reason to cheer, practically everyday, with old economy blue chips bettering performance sizably as compared to past year's performance. And mind you, we are supposed to be in a slowdown. The list that dazzled includes Tata Power, HDFC, Hero Honda, ITC and HLL. Except for HLL, all others reported double-digit growth in top and bottomline. Not wanting to be left behind, new economy biggies displayed a similar performance with Wipro and Mphasis beating street estimates.

Nevertheless, technology growth rates have been sharply revised downwards in the current fiscal. Also, if at all, any impact of the September 11 incidents is likely to reflect in 3Q and 4Q of FY01. Infosys prudently has already declared that results for December quarter are likely to be flat. Consequently, one can expect a similar pattern for the industry.

Although agriculture growth has been revised downwards by CMIE to 6.5%. It is an upturn compared to the last two years of de-growth. Industry numbers continue to weaken as August IIP (Index of Industrial Production) numbers reported a growth of only 1.8%. Also, Government coffers are primarily dependent on industry as agriculture and allied activities are exempted from tax. This is likely to topple balance in the Government's books. Although privatisation has taken its first steps, big-ticket disinvestment is likely to attract strong opposition -- which does not need a valid cause -- considering the low prevailing asset prices.

That said, earning season will enter its peak period over the next two weeks. This is more likely to signal the economy's health. The diagnosis, based on daily reports, does not instill much confidence. Bourses are likely to remain listless unless we have few more pleasant surprises.

Equitymaster requests your view! Post a comment on "Slowdown or no, blue chips grow ". Click here!

  

More Views on News

Top 5 Recent IPO Developments You Should Know (Views On News)

May 12, 2021

So far in 2021, IPOs in India have raised nearly US$ 3 bn, the best start to the year since 2018.

How Did Mindtree Perform in Q4FY21? (Company Info)

Apr 20, 2021

Here's the rundown on the company's latest quarterly results.

5 Big IPOs to Look Forward to in 2021 (Views On News)

Jun 19, 2021

A peak into the hype around the IPOs of internet companies like Zomato and Paytm

HDFC Banking and Financial Services Fund: Emphasizes on the Growing Sector (Outside View)

Jun 18, 2021

PersonalFN analyses the features of HDFC Banking and Financial Services Fund and explains the potential this fund has to offer to its investors.

Can You Make More than 100 Times Your Investment? (Profit Hunter)

Jun 18, 2021

The open secret to multiplying your money in forever stocks.

More Views on News

Most Popular

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

My 'Unlock' Investments (Fast Profits Daily)

Jun 11, 2021

The best unlock investments you can make in the market.

The Most Visible Sign of India's Revival is on Two Wheels (Profit Hunter)

Jun 9, 2021

Investing in the best stocks could result in wealth compounding on a massive scale.

How I Discovered a 400-Year-Old Open Secret to Extreme Wealth (Profit Hunter)

Jun 11, 2021

Charlie Munger's open secret about investing success.

More

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

S&P BSE SENSEX


Jun 18, 2021 (Close)

MARKET STATS