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November 7th, 2007 admin No comments

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Rate Sensitives Face the Heat, as Global Cues Turn Weak

The stock market news for the last week is not encouraging at all. The benchmark market indices ended with losses last week. For the week ended January 23, the BSE 30 share Sensex fell nearly 7 per cent or 649 points to finish at 8,674 points. Nifty, the broader benchmark of the stock markets also slipped 5.3 per cent. It closed 5.3 per cent lower for the same week. The fall was led by negative cues from the global markets. US markets felt the jitters even as Obama took charge as the 44th US president last week. Investors became cautious as reports revealed that measures taken by Obama to stimulate the economy would take time to yield results.

The Dow shed 2.5 per cent in the week ended January 23 amid intensifying fears about worsening recession and worries about the banking industry in US. Investors’ mood turned more bearish after John Thain resigned from Bank of America. The Nasdaq that mainly comprises of technology stocks lost 3.4 per cent during the week largely because the earnings of Microsoft beat market expectations. The software giant also announced huge layoff plans that dampened the sentiments of the investors further. The broader index on Wall Street, S&P 500 too ended 1.4 per cent down last week. Asian markets, mirroring the trends in US and European markets, ended sharply lower in the week. Hong Kong’s benchmark Hang Seng dropped 5.1 per cent to 12,578 levels. The Nikkei index of Japan also lost 6.7 per cent to 8,230 levels.

South Korea’s key benchmark index closed at 1,135 levels, 3.7 per cent lower. Marketmen around the world, were eyeing a bounce back in the markets, around 20th January, that is, on Obama’s inauguration day. But that did not happen. The sudden plunge, once again, in the world markets is on account of fresh fears about global recession. Experts are now warning that the slowdown could last longer than expected. Stock market dealers across the world are now debating whether the markets could touch the October lows again. Coming to stock market India now. In the last one-week, rate sensitive counters were completely knocked out. The BSE index shed a whopping 12.2 per cent. It ended at 1,723.76 and was one of the worst performers among the BSE sectoral indices.

In the realty space, Unitech continued its southward journey and closed at Rs 26, shedding over 10 per cent on a weekly basis. DLF was hammered and the scrip plunged 17.5 per cent to Rs 161. The banking index was another big loser among the BSE sectoral indices. In the week ended Jan 23, it finished at 4,484, down nearly 11 per cent. In the banking segment, ICICI Bank plummeted 14 per cent. The scrip ended at Rs 364. Another interest rate sensitive sector, auto took a bad hit during the week. The auto index on the BSE lost 7.1 per cent during the week. These counters will hog the limelight once the Reserve Bank of India announces another round of rate cuts.

About the Author

Vritika is an investment advisor and is providing reviews on market news india, stock market news, india business news and information on BSE Sensex.