Several initiatives taken by the RBI to pump liquidity into the system and lower inflation numbers (11.44 per cent), failed to provide support to the markets, which continue to slide further and touch new lows.
Weak global sentiments, unimpressive results from the likes of Satyam, HCL Tech and L&T and concerns of a slowdown in GDP ensured that the Sensex dropped below the five-digit mark to touch the lowest level in the last two-years.
The BSE Sensex declined by 552 points or 5.25 per cent to 9,975, while NSE Nifty lost 205 points or 6.26 per cent to 3,074, during the week. While National Council For Applied Economic Research (NCAER) cut the GDP growth estimate to 7.6 per cent from its earlier forecast of 7.8 per cent, Centre for Monitoring Indian Economy (CMIE) reduced its GDP growth forecast to 8.7 per cent from 9.4 per cent earlier. FIIs have sold as much as Rs 10,625 crore worth of stocks in the month of October.
What to expect this week
Marketmen believe that the week will start with a negative bias, on the back of heavy selling on Friday and the markets breaching the psychologically crucial level of 10,000 points. While global markets will have a significant bearing on the Indian markets, Q2 FY09 corporate results could provide some vital cues of the extent of slowdown in corporate earnings.
Results of heavyweights like Reliance Industries, Bhel, Maruti and Wipro are due this week. Investors will also keep an eye out for the mid-term monetary policy review by the RBI on October 24. The easing of redemption pressures from mutual fund and overseas investors, could provide some stability to the markets.
| Stock to watch GODAWARI POWER & ISPAT Last week's close (Rs) 91.72 Prev. week's close (Rs) 102.48 Week's high (Rs) 118.00 Week's low (Rs) 86.50 Last week's ave. daily turnover (Rs cr) 0.52 Prev. week's ave. daily turnover (Rs cr) 0.55 Number of up/down move 2/3 Godawari Power & Ispat (GPIL) is bound to attract investors’ attention in the coming days after it announced on Friday evening that its board of directors would meet on October 25 (Saturday) to consider buy back of shares and declare results for Q2, FY2009. GPIL is a mid-sized integrated steel manufacturer having a dominant presence in the long products segment of the steel industry, mainly mild steel wire. GPIL has plans of backward integration by venturing into mining of coal and iron ore. |
The company had come out with robust set of numbers in quarter ending June 2008, with net sales increasing by 88.3 per cent year-on-year (y-o-y) to Rs 320.44 crore and net profits increasing by 83.9 per cent y-o-y to Rs 38.50 crore. At Rs 91.72, the stock trades at 2.6 times its trailing 12-months earnings.
