A string of bad news on the global front and sustained selling by FIIs forced the markets to close in the red. FIIs sold equities worth Rs 1,380 crore during the week (until January 15). Citigroup and Bank of America reported Q4 losses to the tune of $8.3 billion and $2.4 billion respectively, aggravating investor concerns about problems that lie ahead. North America's biggest telecom equipment vendor, Nortel Network's bankruptcy, too, had some impact on sentiments.
IT stocks hogged the limelight with Infosys and TCS announcing Q3 results. Some solace came in the form of positive IIP numbers (up by 2.4 per cent in November) and declining inflation rate (to 5.24 per cent). The BSE Sensex fell 82 points (or 0.9 per cent) in the week to close at 9,323, while the Nifty fell 44 points (or 1.6 per cent) to end at 2,828.
What to expect this week
A combination of global cues and the outcome of some crucial quarterly results could decide which direction the Indian markets head in the near term. Much of the focus for the holiday shortened week ahead in the US will be on Barack Obama, who takes over as US president on Tuesday.
In India, industry representatives will meet government officials on January 21 to discuss further measures to stimulate the country's economy. Dr. Reddy's, ITC, Reliance Industries and Hero Honda Motors will be declaring their quarterly results next week. The progress over RIL-RNRL gas dispute will also be keenly watched.
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| Stock to watch SBI Last week's close (Rs) 1,164.83 Prev. week's close (Rs) 1,218.50 Week's high (Rs) 1,223.10 Week's low (Rs) 1,107.82 Last week's ave. daily turnover (Rs cr) 379.96 Prev. week's ave. daily turnover (Rs cr) 548.86 Number of up/down move 3/2 The Q3 results of State Bank of India (SBI) will be declared on January 24. With private sector banks like Axis Bank and HDFC Bank having delivered decent results, the markets are expecting good numbers from SBI, too. The cooling of bond yields is likely to positively impact public sector banks like SBI in terms of an increase in profits, as there would be a reversal of mark-to-market provisioning done earlier. |
However, asset quality may deteriorate due to weak macroeconomic conditions. The stock is trading at around 11 times its standalone FY08 earnings.