Widely read:
After many weeks of roller-coaster, the markets remained flat with a single point gain on the Sensex as well as the Nifty. But they remain at their low, to be precise still down 12% from the levels of pre-US attack. The spurt in world stock markets, the US fed rate cut accompanied by a spate of good news from US IT giants, FIIs equity purchases worth Rs 180 crore did enough to prop up the sentiment in - technology, automobiles and pharmaceutical stocks.
While the cash market struggles to breach the 3000-mark, the derivatives segment has witnessed major activity since September 11. While the index futures were introduced in July 2000, the options trading commenced in July this year, following the ban on Badla. Initially, the new product faced strong resentment amongst traders and lack of trading interest resulted in a dip in volumes in cash markets. And the lack of knowledge, IT infrastructure kept the players at bay with the volumes in NSE futures trade at a mere Rs 785 crore in June '01. With growing understanding, the volume at NSE has surged to Rs 2697 crore in August. With markets close to its 8-year low post September 11, the players ran for cover in the derivatives market and the NSE futures trade volumes surged to Rs 6000 crore. Rising volumes accompanied by low transaction cost and increased brokerage income for participants has set the stage for equity derivatives market.
Economy Report Card
The much-awaited public sector disinvestment finally happened. By the weekend, the government concluded the sale of CMC to TCS and Hindustan Teleprinters (HTL) to HFCL. The two deals, worth Rs 200 crore, though not a sizable addition to the government kitty, but assumes significance. This year the governments has targeted Rs 1200 crore from disinvestment of 13 public sector companies. Meeting of these deadlines within the current fiscal will improve India's ratings, which was downgraded in August since tardy PSU-sell-off was cited as one of the reasons.
Global market rises from the roots!
The ninth rate cut by 50 basis points by the US Federal Reserve, a 75 billion dollars revival package of for US economy, positive earning outlook from IT giants rejuvenated the US markets. The Dow Jones was up 3 percent and Nasdaq gained 7 percent. With an average 3 percent gain the Japanese, UK and Hongkong indices have registered stronger gains than our domestic bourses. But the World Bank report throws a gloomy side is- a reduced economic activity across borders may cause the developing economies to grow below a percentage as against earlier estimates of 2.90 percent.
Outlook
The market's wait for the second quarter performance numbers and more keenly of the Indian technology majors. Although markets have somewhat discounted that technology companies will grow at half the expected levels i.e. 15-20 percent, the sector's positive outlook will be guided from the upbeat performance of US IT majors. And the course of the impending war and the manner will also have a bearing on the markets direction.
This week in stocks
A rather subdued week, as the markets inched by just 15 points at BSE and XX% at NSE with the partial gains again coming at the end of the week
The US attacks dawned a new era for Indian equity derivatives market as the volumes surged- consider this-
FII turned net buyers in the current month with 180 crore of investments
Economy
The falling of international crude prices will have two good spill over effect for the country- the trade deficit will fall and it will become easier for the government to implement the dismantling of the APM.
The privatisation programme takes a hit as disinvestment ministry probes in the price rigging of CMC. With more and more bidders backing out, government may face a tough time in meeting the disinvestment target of 13 PSUs.
This week govt doled out sops to boost the saging exports
International Markets
Fed cut the US rates to its 40 years low, but the same failed to enthuse the markets as the investor cinfidnece has taken a hit since the US attacks.
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