Stock markets continued their downward journey at the start of the week, with technology stocks being the worst casualty. The BSE IT was down 50 points on the first trading day. Over the week, this index was down 1.25 per cent. This was largely due to fears of war in the Gulf region. War fears had its effect on the BSE Sensex and the Nifty too, which were down 1.14 per cent and 1.34 per cent, respectively, over the week.
IT stocks underwent correction on the second trading day. Over the week, most technology majors such as Infosys, Wipro and Satyam posted losses. On the other hand, telecom stocks made some gains. For instance, while MTNL rose 17 per cent in the single trading day, it gained 37 per cent over the week. The reasons: new tariffs announced by TRAI, making both Internet dial and calls from landlines expensive.
The week, which had a rather dismal start, finally ended on a positive note, wiping off nearly half the losses for the week. The BSE Sensex was up 1 per cent at close. A 24 per cent jump in net profits of Reliance Industries -- which has the highest weightage in the Sensex -- was largely responsible for the recovery. The stock gained 2.7 per cent on the last trading day.
Other index heavyweights too declared their Q3 results this week. Banking major, ICICI Bank, reported a 16 per cent rise in net profits over the previous quarter ending September 2002. FMCG major, Hindustan Lever registered a 7 per cent rise in Q3 profits over corresponding period last year. Since markets expected a better result, the stock ended up losing 5 per cent over the week. The State Bank of India saw a growth of 28.2 per cent in net profits over the corresponding quarter last fiscal. Among IT stocks, Digital Globalsoft posted a profit of Rs 27 crore as against last year's Q3 profits of Rs 25 crore. As a result, the scrip gained 11.8 per cent for the week.
Internationally, thanks to war fears, the Nasdaq fell 1.58 per cent and the Dow Jones was down 0.94 per cent. As for FIIs, they remained cautious, buying equities worth Rs 172 crore, marginally higher than what they bought last week. Total net inflows for this month reached Rs 888 crore. Domestic mutual funds turned buyers this week, buying equities worth just Rs 5 crore till Thursday.
Meanwhile, SEBI removed 14 stocks from the list of futures and options traded on the NSE and the BSE. Some stocks that got the boot were Hughes Software, SSI, CMC and United Phosphorous. This was on account of dissatisfaction over the trading pattern of these scrips.
War fears continue to haunt the markets. As a result, uncertainty is likely to continue in stock markets. If war fears subside positive developments in the run-up to the budget could prevent a further downslide.