Young Investor

Markets in a minute

RAJALAKSHMI SIVAM | Updated on October 08, 2011

market in a minute (08 03 2011).JPG

After remaining weak for most part of the week, the Indian stock market made a comeback on Friday taking cues from Asian peers. We bring you a snapshot of the week's events from the studio.

Vikram: There's been little action from the retail side for the past few weeks. Wonder what's weighing on investment sentiments.

Aditi: Well, Corporate India's September quarter results are eagerly awaited. With input prices for some sectors continuing to be high, the scorecard may just have some negative surprises for investors.

Vikram: I think the Finance Minister's announcement of a higher borrowing from the market too is keeping investors nervous.

Aditi: It could well be. According to a report, the government intends to borrow Rs 52,800 crore. And that's in addition to the already estimated Rs 4.17 lakh crore!

Vikram: This would, I think, make the country's fiscal deficit challenge difficult to handle…

Aditi: Moody's downgrade on the State Bank of India's financial strength came as a further blow to the market mid-week. The rating agency had highlighted the bank's poor capital situation and likelihood of higher non-performing assets in the coming months for its downgrade.

Vikram: SBI will now have to cough up more for its overseas borrowing. What do you think?

Aditi: True, but Moody's downgrade may not close all the doors of borrowing for SBI. In his reaction, the Chairman of SBI made a point that Bank of Baroda, Punjab National bank and Bank of India are also in ‘D+' grade, the same rating that SBI's been given now.

Vikram: But investors are very clearly depressed! The stock of SBI dropped 4 per cent on Wednesday. It closed the week at Rs 1,751, lower by eight per cent for the week.

Aditi: With the index's heavyweight stock plunging sharply, Sensex dropped below 16K levels on Wednesday. The index closed 287 points lower at 15865 on the day.

Vikram: SBI's downgrade apparently had a ripple effect. Stocks of other PSUs that were in the queue for follow-on public offers after SBI were also beaten down in the market.

Aditi: Telecom stocks too had a bad week thanks to reports that the Department of Telecommunications was mulling over the issue of notices to some telecom players for misreporting revenues and paying lower license fees. Bharti Airtel and Idea Cellular dropped around 6-9 per cent for the week.

Vikram: The global picture isn't any encouraging either for the market. Greece has finally accepted that it will be difficult for it to meet its deficit targets this year.

Aditi: You're right. The debt worry of the Euro zone is prompting caution among FIIs and they are taking money back home. In the first three sessions of the week, FIIs net sold Rs 2,806 crore of equity in the Indian market.

Published on October 08, 2011

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