Young Investor

Markets in a minute

| Updated on: Jun 18, 2011
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Worries over inflation, credit policies and European debt never seem to lose their power. They continue to wield their influence over the stock markets, thereby giving plenty to discuss at the studio. Here's some of the buzz:

Apoorva: Well, that was a wash-out of a week. WPI inflation for the month of May came in at 9.06 per cent from 8.66 per cent in April. Looks like the RBI is dead-set on battling inflation , even if it means squeezing growth in the process. It's raised repo rates again by 25 basis points in its mid-quarter policy review. Highly leveraged companies are going to find it really tough. The Sensex took a nose-dive and lost over 400 points!

Ritvik: True, but the monsoon has been good so far so there may be some relief on the food inflation front. Anyway, you would think the markets would be used to high inflation and rate hikes by now! But still, since misery loves company, cheer up. Global markets too had a tough week, with Greece on the brink of an economic crisis and its Prime Minister scrabbling to form a new government.

Apoorva: That's not the only trouble. The people of Greece are taking to the streets in riots to protest budget cuts and unemployment. Banks with exposure to Greek debt are at risk of a credit downgrade. Restructuring Greek debt could shake the whole Eurozone! And it's not like the US is in prime condition either to counter European woes.

Ritvik: You need to look for the bright spots in all this gloom. Not all investors had palpitations last week. Retail stocks were a healthy lot after more positive news, this time from a government source, on FDI in multi-brand retail. Bata India touched a 52-week high, as did Shoppers Stop, Pantaloon, Jubilant Foodworks and Lovable.

Apoorva: Tell that to investors in Reliance Industries. That stock tanked 6 per cent! Its weekend move into insurance, acquiring a 74 per cent stake in the life and general insurance business of Bharti-AXA from Bharti Enterprises hardly found favour. The litany of woes just keeps building for this company. The stock of Maruti Suzuki was also facing the heat for most of the week. But thankfully, the workers' strike has ended.

Ritvik: Ah, but investors of Ashok Leyland were a cheerful set. The company announced a bonus issue of one share for every share held. The stock shot up 5 per cent just after the announcement.

Apoorva: That euphoria was short-lived! The stock lost about 3 per cent by the week's end. And you may just want to hold your horses. A panel of ministers is supposed to gather soon to discuss a possible hike in diesel, cooking gas and kerosene prices, according to Oil Minister Jaipal Reddy. Guess who's going to have the last laugh?

Published on June 18, 2011

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