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Volatile close to the week!
Fri, 3 Dec Closing

Volatility continued to rule the roost during the closing stages as well, with indices going above and below breakeven for a brief period of time and finally ending the day marginally in the negative. Thus, the Sensex lost around 30 points today whereas Nifty showed a minor loss of around 20 points (down 0.3%). However, the BSE Midcap as well as the Small cap indices received the rough end of the stick today, with each down 2% and 3% respectively. The advance to decline ratio on the Sensex was evenly split with there being one gainer for every stock that closed in the red.

Asian indices closed mixed today whereas Europe is trading mostly in the green currently. The rupee was trading at a value of 45 to the dollar at the time of writing.

The spotlight clearly was on midcap and small cap stocks today as the news of SEBI's crackdown on illegal trading in these counters sent quite a few of them scurrying for cover. Companies like Welspun Corp and Ackruti City that were named by the regulatory watchdog lost a whopping 27% and 20% in today's trading session. Other midcaps that lost significantly include KS Oils, Videocon Industries and the like. A large number of small caps also met with a similar fate, with the notables being Parekh Aluminex, GSS America and Murli Industries, the last one again being directly accused by SEBI.

Steel stocks closed mostly weak today with leading losers being Tata Steel and JSW Steel. Tata Steel hasn't exactly set the streets blazing with its stock price performance in recent times. And this could mainly be put down to the performance of its European subsidiary, Tata Steel Europe. But if a leading business daily is to be believed, there are a lot of things happening in the company that would make it value accretive going forward. For starters, the company is trying to focus on increasing raw material security. It believes that once the mines in Canada and Ivory Coast and couple of other places start getting operational, raw material security for Europe can be enhanced to as much as 25%.

Aside of it, the company is also trying hard to make the consolidated entity a company that sets the standard for a lean manufacturing process and tight and disciplined cost structure amongst other things. Going by the management's past track record, there are strong chances that we would witness a completely transformed company a few years from now.

While the shareholders in Indian banks have made merry on account of higher NIMs in the sector, it certainly isn't good news for the banks' customers. We are talking about both depositors as well as borrowers. RBI Governor, Mr Subbarao is of the belief that the Indian banks need to lift deposit rates and lower the interest rates they charge to their customers so that there is more savings and investment in the country. Subbarao was of the opinion that Indian banks' NIMs were higher than their peers in other emerging markets even after accounting for mandated social sector obligations. It should be noted that there isn't enough capital available in the country to fulfil its enormous investment needs and hence, raising deposit rates in order to attract more savings from its citizens would indeed make sense.

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Feb 16, 2018 (Close)