Dec 14, 2002|
Banking on good news
The benchmark indices saw over 1% improvement this week on the back of some clarity on disinvestment, indications of lower interest regime continuing, passing of the cable bill and announcement by FM that housing benefits will continue. However, the key change was an overall positive sentiment towards the banking sector.
The week saw hectic activity in software, PSUs and banks. News of Infosys upping its recruitment led to speculation of good BPO prospects for the company. Also, MsourceE (Mphasis’s call centre subsidiary) signed up with Accenture, a global software services consultancy, as the most preferred execution partner for BPO. This led to some strength in the sector. But towards the end of the week, NASDAQ blues seemed to have hit sentiment.
After announcing intentions of strategic divestment of HPCL and an IPO for BPCL, the privatisation programme received a boost with the stake sale of Engineers India was cleared. Consequently, one saw renewed faith in PSU counters. Even other PSUs like Gail and ONGC, which were not concerned with divestment, gained on the hopes of participating in HPCL’s divestment.
But perhaps the sector of the week crown should go to the banking sector. The week saw a flood of positives. With news percolating from every corner on how banks, both public and private, are getting their act together to recover their NPAs and ruling by the courts against a particular defaulter, investor enthusiasm was evident. The FM’s comment on reducing interest rates further aided this positivism. To top of it all, the market was flooded with news/rumours of merger moves and strategic sales by different banks. At the weekend, the FM provided another shot in the arm for the sector by indicating that housing sops will continue.
With the passing of the cable bill, one also saw hectic activity in the media counters as well. Auto stocks saw a volatile week, while FMCG counters were largely range bound. With the CMIE indicating a slowdown in the second half of current fiscal, demand prospects seem challenging for India Inc. However, the bourses seem to have come out of their pessimistic mood in the hope that 2003 will be a better year for investors.
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