Christmas failed to cheer the bulls on the street as the markets seem to be running out of steam. Weak global cues, rising geo-political tension between India and Pakistan and concerns about corporate earnings ahead of Q3 FY09 results weighed heavily on the market. While inflation further declined to 6.61 per cent (6.84 per cent a week earlier), a decline of 22 per cent in the advance tax payments in Q3 FY09 dampened market sentiments.
There was little support from the FIIs, who sold equities worth Rs 151 crore during the week (until December 24). The market slipped on all the four trading sessions of the truncated week. The BSE Sensex plunged 771 points (7.6 per cent) to close the week at 9,329 while the NSE Nifty lost 220 points (7.2 per cent) to 2,857.
What to expect this week
While it is difficult to gauge the direction in which the markets will move this week, chances are that it will be a lacklustre one, with most foreign fund managers on vacation for Christmas and New Year. Analysts say that the markets have already factored in the weak advance tax numbers announced on Friday.
The second leg of stimulus, which is expected to be announced anytime soon, could provide a trigger. There is a positive bias currently as a sustained decline in inflation has raised expectations of a further rate cut by RBI to revive credit demand. While the central bank's fiscal year-end target for inflation is at 7 per cent, economists are of the view that it could drop to 2-3 per cent.
| Stock to watch SATYAM COMPUTER Last week's close (Rs) 135.57 Prev. week's close (Rs) 162.75 Week's high (Rs) 168.55 Week's low (Rs) 114.60 Last week's ave. daily turnover (Rs cr) 750.77 Prev. week's ave. daily turnover (Rs cr) 655.28 Number of up/down move 1/3 Shares of Satyam Computer Services could witness action as its board is meeting today to consider a share buy back. The proposed buyout of two Maytas companies had to be called off due to opposition from shareholders. Satyam is looking at various options to regain investor confidence. Mangalam Srinivasan, an independent director on the board has already stepped down, citing moral responsibility. The stock has lost around 40 per cent from December 16, 2008, the date when the deal was announced. At Rs 135.5, the stock is trading at 5.5 times its 12-month trailing earnings. |
