Even Yashwant Sinha's last-ditch efforts to win over the investor couldn't liven up the markets. Bogged down by political pressure, the FM partially rolled back the tax proposals -- resulting in an estimated loss of Rs 2,150 crore to the exchequer -- but the markets gave it a cold shoulder. The reason: continuing arson and loot in Gujarat plus the so-so performance of India Inc. Amidst all this, BSE Sensex managed to make some marginal gains initially but then Nasdaq fell, and so did the Sensex. Net-net BSE Sensex clocked a mere 7 points gain while S&P CNX Nifty was down 2 points.
The week started off on a low-key note with second-rung tech stocks hitting a bottom. Case in point: Hughes Software (net profits down 43%) and Polaris Software (net profit down 12%). Even Index heavyweights such as HCL Technologies (net profits up 2%) and Satyam Computer (net profits up3.4%) had a relatively poor scorecard. The saving grace: Digital Globalsoft, its bottomline improved by 50%. The performance of these companies didn't impact the markets though. Tech companies, however, are not expecting much growth in revenues this quarter. But they are hopeful the next three quarters will be better. Even globally, things are not looking up. For instance, in the US, companies across sectors have issued fresh profit warnings, quashing hopes of recovery. Down 3% (346 points), the Dow Jones closed below the crucial 10,000-mark and the Nasdaq lost 7% (132 points) over the week.
Back home, the markets were not really enthused by the results of old economy majors. For example, an 11% fall in the net profits of Reliance Industries was in line with market expectations. The surge in its share price contributed to a 13-point gain on the Sensex in one session. As for cement stocks, a fall in their prices saw the sector majors -- ACC and Gujarat Ambuja --- report a 9% fall in profit margins. Therefore, their share price closed the week almost unchanged.
However, the results of pharma and auto companies were encouraging. Case in point: Glaxo-SmithKline Pharma, a Sensex constituent, registered a 43% rise in its net profits during the said quarter, while Sun Pharma improved its bottomline by 29%. The Chennai-based, two-wheeler major, TVS Suzuki, witnessed a whopping 448% jump in its net profits. Consequently, its scrip price rose by 15% this week. Though it may be too early to draw a conclusion that these sectors have survived the recession, but it definitely gives the impression that consumer spending is likely to go up.
Outlook
All this is fine, but something more is needed to re-energise the markets. And with the finance minister trying to please everyone, the economy will never be able to push bold
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