Like on previous occasions, the markets again made an attempt today to come off the day's lows but met with stiff resistance this time around. Consequently, they closed pretty close to the lows of the day and ended the session as well as the week deep in the red. The Sensex closed lower by around 220 points (down 1.3%), whereas NSE Nifty edged lower by around 75 points (down 1.4%). BSE Midcap and Small cap indices came in for even more severe punishment, ending the lower in the region of 3% each. More than six stocks closed in the red on the Sensex for every one stock that inched higher.
While Asia closed the day in the red, Europe is also trading rather weak currently. The rupee was seen trading at Rs 45.7 to the dollar at the time of writing.
Today's closing takes the market lower by around 7% from the highs of the current bull market in Indian equities. Thus, technically it cannot be termed as a correction just yet as for the same to happen, there has to be a decline of 10% or more. This is not to say that the current decline will not result in a correction. Looking at how the events are panning out across the world, a correction does look like a strong possibility. Infact, do not be surprised if markets crack a little more than anticipated. For a long term investor though, the correction should present an opportunity to buy into the India growth story, which is looking as solid as ever.
The already intense telecom price war has just gotten more intense. As per a leading daily, Reliance Communications, one of India's largest telecom companies has for the first time launched a plan that does away with the need of metering of rates. Through this plan, it will offer its customers unlimited talk time on a single monthly recharge with an upper limit of 3,000 minutes of talk time within its own telecom network and 900 minutes of talk time to any other network. As per the company, the customers will not have to fear running out of pre-paid balance and they can re-charge once in a month. Reliance Communications' competitors however maintain that the new plan is just another variant of existing plans offered by other companies and hence, there is nothing pathbreaking in it. Reliance Communications closed in the red today.
Hotel stocks closed weak today with the only exception being Indian Hotels. Buoyancy in the counter could be the result of news in a leading daily that its brand, Taj, is seeking to expand its footprint and is looking to set up luxury properties in Africa, West Asia, China and South East Asia. It should be noted that the company already has some 16 properties overseas and with the proposed expansion, the number is likely to go up significantly, thus leading to increased contribution from the overseas business. Little wonder, the company is also considering the creation of a holding company that will manage all of its overseas assets. The company has not ruled out the possibility of more acquisitions in the future if the need arises. Besides, it is also considering the franchise route of operations. Clearly, this is another Tata Group company with truly global ambitions. Let us just hope that it does not stretch itself too much financially just as some of the other group companies have done.