Financial Daily from THE HINDU group of publications
Monday, Apr 17, 2006
Financial Daily from THE HINDU group of publications Monday, Apr 17, 2006 |
|
|
|
|
|
|
|
Markets - Outlook Columns - A Ringside View JAYANTA MALLICK
Is Dalal Street's tryst with rumourmongers over for the time being? If the liquidity returns and the benchmark indices rebound, perhaps, this question will not be answered at all. But the blot will remain. It seems that the Indian equities market experienced a short-lived, but powerful tremor in the period between April 7 and 14 for a wrong reason. A seemingly market-distorting phase cannot affect the fundamentals and the mid-to-long term outlook, but can surely influence the sentiment and liquidity. As predicted in these columns last week, the market slid substantially taking a cue from the overseas fund flow. The move by BSE and NSE to jack up margins on share transactions by 2.5 percentage points from April 17 is also likely to rein in the excesses caused by leveraged trading to a significant extent. A rather forced bout of profit taking and a quick adjustment in the short-term trading/investment strategy saw the big players through the turmoil last week. This week, net positive investments by the deep pockets, such as FIIs and local mutual funds, may bring the market back to normal. Once the liquidity turns positive, the cascading effect is likely to ensure the bearish psychology takes a break. The possibility of a technology sector-led recovery in the benchmark indices has brightened after the better-than-Street-expected results and guidance by Infosys. The results of TCS, Wipro and Satyam, scheduled to be announced this week, may further direct the market towards factoring in the fundamentals and growth prospects. The so-called concern over the relatively high Sensex P/E may take a back seat in view of the emerging prospects of the large- and mid-cap stocks in the next one year.
Bullish on corporates
In fact, this week may provide a new base for the next phase of the continuing bull run in the Indian equities. According to a section of the market observers, the results and growth plans of a string of listed manufacturing outfits this financial year may be a revelation. It is expected that the in the next four quarters, India may prove to be global manufacturing hub for a number of new items. Ever increasing band of global fund managers are trying to look ahead and gaze more intensely at the crystal ball to find out how to price the Indian equities and direct the flow. During the 2006-07, the market making on the Dalal Street may completely be dominated by FIIs and the domestic investor community's participation may be reduced to the second fiddle.
Related Stories: More Stories on : Stock Markets | Outlook | A Ringside View
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|