Business Daily from THE HINDU group of publications
Tuesday, Mar 06, 2007
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Business Daily from THE HINDU group of publications Tuesday, Mar 06, 2007 ePaper |
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Stock Markets Markets - Commentary Columns - Sensor Lokeshwarri S. K.
Pointers Selling across global markets Poor market breadth Lacklustre volumes
The global wave of profit booking and equity dilution that started last Tuesday continued on Monday morning. The panic was fuelled further by the fall in US markets on Friday that caused the Dow Jones Industrial Average close the week down 4 per cent, its worst weekly decline on a percentage basis since end of March 2003. Asian markets started on a nervous note with Toyota Motor Corp. leading the Japanese markets down after a report on Friday showed a drop in consumers' confidence in the US. Nikkei closed 3 per cent down and the Hang Seng closed the day down 4 per cent. Other Asian markets such as Malaysia, Indonesia, Taiwan, Korea and Singapore too closed the day lower between 2 and 4 per cent. The opening in the Indian market was in tandem with the rest of the Asian markets. A fresh wave of selling gripped stocks across the sectors right from the opening moment. All attempts at recovering were met with fresh bouts of selling and the Sensex eventually went on to end the day lower by 471 points or 3.66 per cent. Nifty lost 4 per cent. There was no place to hide in the market, as the market breadth was one of the worst seen in recent times. There were 2,363 declines on the BSE to 220 advances. The second rung stocks too were unable to buck the trend. The BSE Midcap and Smallcap Indices ended the day lower by 5 per cent. Volumes were relatively subdued indicating that many investors preferred to stick to the sidelines for the day. Volumes in the derivative segment were also modest. The selling was led by the front-line stocks. Sharp falls were witnessed in the pivotals such as ACC, Reliance Industries, State Bank of India and Tata Steel, all of which lost between 4 and 6 per cent for the day. Technology stocks saw deep cuts too. Infosys Technologies lost 4.6 per cent, Satyam Computers lost 3 per cent and TCS closed lower by 4 per cent and Wipro lost 6 per cent. Profit booking was also witnessed in Capital goods stocks. BHEL lost 4 per cent, Larsen and Toubro closed the day lower by 5.5 per cent, ABB lost 5.6 per cent and Siemens ended the day down 7 per cent. Two of the cement stocks, Grasim and Gujarat Ambuja Cements, managed to close the day in the green. R Systems International closed the day lower by 18 per cent. The stock was affected by the reporting of poor earnings for the quarter ending December 31, 2006. Indian Rupee dropped to the lowest level in four months. The currency was affected by the non-stop selling by global investors in the equity markets over the past week. Commodities were not spared either. Gold touched a five-week low as investors sold gold to cover the losses that they suffered in equities. Crude oil for April delivery dropped 1.4 per cent on Nymex on concerns regarding slowing global growth.
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