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Markets this week
The Sensex bounced back on Monday on the back of positive global cues and heavy short covering as governments worldwide stepped up efforts to enhance liquidity in the financial markets.
The Finance Minister, Mr P. Chidambaram's promise of more measures to infuse liquidity coupled with his advice that there was no reason to act in haste or to give room for panic boosted the markets.
The Sensex surged 7.42 per cent from its previous close, gaining 781 points to end the day at 11,309. The Nifty gained 6.42 per cent, closing at 3,490.70.
TCS' deal worth Rs 1000 crore, spread over six years with the Ministry of External Affairs represents its continued penetration into the domestic e-governance spends.The shares were closed at Rs 592 on the BSE.
The Reserve Bank of India's announcement on Tuesday to provide liquidity to mutual funds, which are facing redemption pressure, turned out be a damp squib.
Out of the Rs 20,000 crore of short-term funds offered at 9 per cent interest for on-lending to MFs, banks availed themselves of only Rs 3,500 crore.
The reason, bankers say, is that they did not have enough securities to pledge with RBI to borrow funds.
The five listed Gold ETFs saw their asset base increase by 12 per cent in September as the rupee depreciated and
investors shied away from stockmarkets.
Their shares gained more than 19 per cent from a month ago, when the Sensex and the Nifty lost 19.57 per cent and 17.45 per cent respectively.
The total asset base of the ETFs jumped to Rs 727 crore as on September 30, 2008 from Rs 650 crore a month ago, while the mutual fund industry recorded a decline of 2.8 per cent in its assets under management.
On Wednesday the markets opened lower on the back of weak global cues and heavy selling from FIIs leading to a more than five per cent drop in the Sensex and the Nifty. The US, euro zone and Japanese economies are all widely expected to slip into recession, threatening growth in emerging markets.
FIIs were net sellers of equities for Rs 1,030 crore while domestic institutional investors were net buyers for Rs 670 crore. The Sensex closed at 10,809, down by 674 points and the Nifty closed at 3,338, losing 180 points.
The Reserve Bank of India announced a host of measures including a 100 basis points cut in
Cash Reserve Ratio (CRR) to infuse Rs 40,000 crore into the liquidity-starved economy.
The RBI steps, followed by another set of measures announced by the Finance Minister, came after the Sensex fell
by 674 points during the day.
The cut in CRR, the second in a single week, will release another Rs 40,000 crore to banks. With this, the additional funds made available to banks now stands at Rs 100,000 crore. Last week, the RBI had announced a 150
basis points reduction in CRR. Both CRR revisions will be effective from the fortnight beginning October 11. CRR, the portion of deposits banks have to keep with RBI, has now been reduced from 7.5 per cent to 6.5 per cent.
Larsen & Toubro witnessed a strong order inflows for the quarter ended September 2008, in contrast to earlier June
quarter.
For the quarter ended September 2008, L&T's standalone revenue grew by 40 per cent to Rs 7,682 crore over the previous year. While the net rose by 32 per cent, Operating profit margins suffered a mild dip to 10.4 per cent.
The SEBI had increased the margin requirement for exchange traded equity derivatives to protect the interest of investors, in view of high volatility witnessed on bourses in the recent days.
"With a view to ensure market safety and safeguard the interest of investors, it has now been decided that the exposure margin shall be higher of 10 per cent or 1.5 times the standard deviation," SEBI said in a statement.
The market opened weak on Thursday despite the measures announced by the Government and the financial markets regulators to boost investor confidence.
The bellwether Sensex plunged into intra-day low of 10,017, losing 800 points, before recovering to close 227 points down from Wednesday's close.
Bearish sentiment in global markets and heavy selling by FIIs drove many blue chips to all- time lows, said market
participants.
The late recovery was supported by bargain hunting by domestic institutions which were encouraged by the lower inflation numbers of 11.44 per cent.
The Sensex finally closed at 10,581, falling over 2 per cent, while the Nifty closed at 3269, down by 69 points.
HDFC Bank's second quarter net profit grew 43 per cent to Rs 528 crore from Rs 368 crore. The growth was mainly on
account of higher interest income on the back of strong credit growth.
Net interest income grew 60 per cent to Rs 1,867 crore (Rs 1,163 crore) and total advances grew 64 per cent to Rs 1,07,820 crore (Rs 65,812 crore). Net interest margin was 4.2 per cent (4 per cent).
Reliance Industries touched a new 52 week low on Thursday as the stock dipped 12.65 per cent during intra-day trade. The stock plunged to a low of Rs 1,327 and closed at Rs 1,397.25, 8 per cent below the previous day's close.
"As FIIs are taking money out of our markets to repay their obligations back home, and the mutual funds are facing
redemption pressure, it comes as no surprise that the stock has been heavily sold," said an analyst.
The relentless selling by FIIs have added up to net sales of $11 billion by them so far this year. This week so far, FIIs have accounted for net sales of Rs 2,353.78 crore. And on Thursday, they were net sellers for Rs 1,160 crore.
The Sensex on Friday sank to more than two-year lows, going below the psychological 10,000 points on panic
selling by funds and general investors. After a promising start, the Sensex dropped by 606.14 points, or 5.73 per cent, to 9,975.35, a level last seen in June 2006.
The key-index dipped to 9,911.32 during the day and a high of 10,786.93. Similarly, the wide-based National Stock Exchange index Nifty tumbled by 194.95, or 5.96 per cent, to 3074.35 after touching the day's low of 3046.60 and a high of 3335.95 points.
Marketmen said the Sensex dipped to the lowest level in over two years on concerns of a sharp global economic slowdown and sluggish corporate earning.
Satyam Computer Services on Friday announced a consolidated net profit of Rs 580.85 crore for the second quarter ended September 30, a growth of 42 per cent over the corresponding period a year ago.
The firm had a net profit of Rs 409.09 crore in the second quarter of FY'08, Satyam Computer Services said in a filing to the Bombay Stock Exchange. The total income rose by 35 per cent to Rs 2,898.87 crore for the quarter under review, from Rs 2,142.26 crore in the year-ago period.
Compiled by S Vasudevan
Podcast by M J Madhavan
and
S Narayanamurthi
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