The dollar dived to its lowest level versus the yen in years and fell against the euro. Oil prices shot up. Morgan Stanley slashed earnings estimates for Citigroup and other U.S. banks, citing slower equity capital markets and a severe deterioration in credit conditions. The recession in the U.S. is imminent with the way job are being cut. Back home, the bad news on the industrial slowdown was a jolt. Looks like the worst is yet to come.
Monday started on a bad note with a sharp fall in the early trades. But the markets managed a comeback. The Sensex recovered over 500 points and Nifty over 150 points from their days low. Momentum stocks like RPL, Bharti, ACC, Bajaj Auto and RCom witnessed buying interest. Finally the Sensex closed lower and the Nifty closed slightly higher from Friday's close.
The U.S. Fed, along with its peers in other developed countries, decided to lend $200bn to the tense banking system in a bid to bolster liquidity. Naturally the market responded favourably. Among the Sensex 30, 20 stocks advanced while 10 declined. RIL, L&T and DLF were among the major gainers, while; ICICI Bank, HDFC and Bharti were among the major laggards. The IT sector as a whole was under pressure.
The market started well on Wednesday, but the disappointing industrial production numbers post sun-outage took their toll. As a result, the market tanked on Thursday. Fortunately, the week ended on a good note with the market rising the most in a month.
All BSE sectoral indices ended the week lower than Monday's close. The worst hit with the BSE Bankex. It closed on Monday at 9434.44 but slumped to close at 8477.46 on Friday. This was partly due to the ICICI Bank debacle, to the loan waiver to farmers in the Budget and to the statement made by the finance minister that borrowing costs should be cut on home loans.
Out of the 30 BSE stocks, 12 closed positively (when compared with last week's closing). ACC gained the most at 8.93% followed by Ranbaxy at 6.70%. Bajaj Holdings & Investment Ltd was the worst performer at -59.14%. In the earlier week, Maruti Suzuki was the only Sensex stock to have gained (7.60%). Last week, it lost (-)10.50%. All the infotech stocks lost: Wipro (-11.01%), Satyam (-10.60%), TCS (-5.10%), Infosys (-4.43%).
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