This week it was the bears who ruled. Weak global cues, inflation data and a higher than expected contraction in the UK economy which could lead to further risk aversion all dampened sentiment. Microsoft refused to provide any guidance. China’s economy grew at the slowest pace in seven years in Q4 of 2008.
Obama’s immediate priority will be to push through his version of the economic stimulus (worth US$825bn). But the question is how effective it will be. The UK has launched another rescue plan for its banks and there is talk of Japan announcing a new one anytime soon.
Monday started with mixed cues from the overseas markets. However, in the second half of the day, strong cues from the European markets lifted the sentiment and it closed on a flat note. Among the sectoral indices, BSE Bankex was the top loser followed by BSE Auto, BSE IT and BSE Pharma. Among the major gainers were BSE BSE Metal, BSE Realty, BSE Oil & Gas and BSE Capital Goods. Even BSE Mid-cap and BSE Small-Cap index gained.
On Tuesday, the bears tightened their grip over the bourses. A sharp bounce back was witnessed as traders covered their shorts after CERC announced that it had hiked return on equity for power units from 15.5% to 14%, which would be applicable from 2009 to 2014. Although the spike was short lived and another bout of selling dragged the Nifty and Sensex down.
The Indian market extended losses to a third straight trading session on Wednesday as a selloff in the equity markets across the globe triggered a broad-based selling on the Indian bourses. The slide was led by metal, banking, oil & gas, realty and IT stocks.
On Thursday, the Indian bourses managed to end with marginal gains. It started off with smart gains following firm cues from the international equity markets but profit booking resulted in just marginal gains at closing. Among the Sensex components, 15 stocks ended in the red and 15 stocks ended in the positive terrain. Among the major gainers in Sensex were RIL, Bharti, ICICI Bank, HDFC and BHEL.
Friday once again belonged to the bears. The Sensex closed at 8674 and the Nifty at 2678.