Amid increasing worries about the world economy and subdued Q3 earnings of the Indian companies, equity markets declined for the third consecutive week. The Sensex declined by 655 points with the negative weekly returns of 7 per cent and closed at 8,674 points.
During the week, FIIs and mutual funds have been net sellers to the tune of about Rs 2,285 crore and Rs 401 crore respectively. Among the key developments, the share prices of Educomp fell to Rs 1,435 on Wednesday due to rumours pertaining to accounting issues.
However, the stock recovered to current levels of Rs 1,747 after the management issued a clarification.
What to expect this week
Markets will remain closed on Monday on account of Republic Day. For the rest of the week, sentiments would be cautious ahead of the Reserve Bank of India policy review on Tuesday (27 January 2009) and expiry of derivatives contracts. The market expects the RBI to cut key rates given lower inflation numbers.
Meanwhile, the Prime Minister's Economic Advisory Council on Friday lowered India's growth forecast for the current fiscal to 7.1 per cent from 7.7 per cent, on account of global slowdown. Overall, along with domestic factors, investors also need to watch out for negative global cues.
More From This Section
| Stock to watch SATYAM COMPUTER Last week's close (Rs) 38.85 Prev. week's close (Rs) 24.48 Week's high (Rs) 39.32 Week's low (Rs) 23.03 Last week's ave. daily turnover (Rs cr) 435.33 Prev. week's ave. daily turnover (Rs cr) 395.20 Number of up/down move 5/0 The stock of Satyam Computer Services might witness more action this week given that engineering and construction major L&T has increased its stake in the company from 4 per cent to 12 per cent. The share price of Satyam Computer rose by a whopping 31.25 per cent on Friday to close at Rs 38.25 after a couple of large purchases by L&T. |
The market has given a thumbs up to L&T’s action on hopes that the company will takeover the troubled software firm. The move will not only help L&T salvage its earlier investments and strengthen its position in the company, but is also seen as a move at stalling takeover attempts by rivals.
With the increased stake, L&T has become the largest shareholder and thus is entitled to a seat on Satyam’s board, believe analysts. According to takeover rules, L&T will have to make an open offer if its stake touches 15 per cent.