Business Daily from THE HINDU group of publications
Monday, Jan 21, 2008
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Business Daily from THE HINDU group of publications Monday, Jan 21, 2008 ePaper | Mobile/PDA Version |
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Stock Markets Markets - Outlook Columns - A Ringside View
Black Friday: Worried stockbrokers looking at the monitor as the BSE sensex tumbled heavily on Friday. — After last week’s sharp fall, as anticipated in this column, Dalal Street would strive this week to bounce back, but may find it difficult in the process. Nevertheless, bull operators are likely to make a valiant attempt to boost the sentiment on the first day of the week. According to market sources, margin calls, which surfaced last Friday towards the closing session, did have a negative effect on the market, particularly on the liquidity. A spill over effect of that is still expected on Monday. LIC and domestic mutual funds are likely to fresh investments in the blue chips and select fundamentally strong counters, but fight shy of taking up the market driver’s seat. FIIs, who have turned distinctly risk-averse, may also slowly to get their acts together in the coming days. Tightened liquidityA programme-generated sell-offs, after the key indices breached technical support levels, by some overseas institutional investors brought the valuations down on Friday. The sudden dip in sentiment and a serious correction prompted reduction in short-term liquidity, as many participants tended to pocket paper profits through the week. Among the speculative elements, who have seen their assets lose shine, may prefer to shift and churn. Some would need to nurse their wounds for a while. Market’s recent obsession with price actions, and not the fundamentals, however, has definitely been tamed to an extent, at least for the short-term. The missing momentum is unlikely to allow fancy valuations in a hurry. Market intelligence suggests that in the intervening period before the Union Budget and now, apprehension of more such a short-spell of sharp correction may contain punting instinct within a limit. Corporate deliversA study by Religare, shows that in the first flush of third quarter results by 150 companies, the average bottomline growth has been around 30 per cent, while the average topline improvement recorded was of about 20 per cent. Though fund managers find the current valuations more attractive, and the results by and large in line with expectations, everybody seems to prefer to wait and watch the others to make the first move. (Responses may be sent to jayanta_mallick@thehindu.co.in) More Stories on : Stock Markets | Outlook | A Ringside View
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