Financial Daily from THE HINDU group of publications
Wednesday, Oct 19, 2005
Financial Daily from THE HINDU group of publications Wednesday, Oct 19, 2005 |
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Markets
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Commentary Columns - Sensor Weak rupee puts bears on front foot Alagappan Arunachalam
THE bearish sentiment continued to prevail in the markets on Tuesday. While the bulls made their presence felt in the early hours, the bears wrested control in the later hours hammering it down to close with across the board declines; this trend has been continuing since Friday last. Almost all indices on the BSE closed with declines. The capital goods and FMCG oriented indices were the only ones to register gains; the gains, however, were marginal. Announcements of an export-growth slowdown and widening trade gaps, a deteriorating rupee, announcements that the Government wouldn't interfere with the currency market aided the cause of the bears. The bears have been controlling the markets from October 4, since then the bellwether indices have registered declines of more than 7 per cent. Selling pressure in later hours pulled the BSE Sensex and S&P CNX Nifty into the red. The Sensex fell by 80 points, while the its wider brother 0.7 per cent. Technology oriented indices on the BSE - IT and Teck indices - registered sharp declines of 1.8 and 1.3 per cent. Dominating the negative sentiment were media stocks - TV Today and Crest Animation. Trailing them were large software stocks HCL Infosystems, Satyam Computers, Hexaware, Wipro, Infosys and MphasiS BFL all of which declined by more than 2 per cent. Losers in the telecom space included Himachal Futuristic, MTNL, VSNL and Shyam Telecom. The metals sector was another loser; Tuesday's trading shaved off 1.1 per cent of the index. The bearish mood, which set in the later weeks of September, continued to dominate the index. The BSE Metal index at 6197 points is lower by about 1100 points since the historic high it registered on September 20. Leading the pack were midcap and small cap stocks - Jindal Saw, Shah Alloys, Deccan Gold, Lloyds Steel, Tinplate, Kalyani Steels and Southern Iron and Steel. Each of them lost more than 3.5 per cent. Trailing them were larger metal players such as Sterlite, Tata Steel, Madras Aluminium and Vesuvius. NDTV reported a poor scorecard. A surge in earnings for the second quarter was due to extraordinary earnings; sustainable earnings continued to be negative. Despite selling pressure on its counter the stock managed to stave off a sharp decline. A sharp downward trend since the beginning of September suggests that investors appear to have been expecting a drop in earnings. Eveready Industries reported a 45-per cent decline in earnings during the second quarter. Though volumes on its counter were substantially higher, the stock failed to make any significant movement.
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