LIFE LEARNED LESSONS BY SEVAK

Market Still Uncertain: Trade With Caution Hopes of stimulus package and rate cut to boost economy helped key benchmark indices cut early losses and settle with marginal losses in the week ended Friday, 5 December 2008. The market edged lower in three out of five trading sessions. However small and mid-cap stocks outperformed on momentum buying. The BSE 30-share Sensex lost 127.52 points or 1.40% to 8,965.20 in the week ended Friday, 5 December 2008. The S&P CNX Nifty declined 40.70 points or 1.47% to 2714.40 in the week. The BSE Mid-Cap gained 46.48 points or 1.63% to 2,892.95 and the BSE Small-Cap index rose 25.81 points or 0.78% to 3,323.54. Both the indices outperformed the Sensex. Sustained selling by the foreign institutional investors (FII) to shore up resources to beat the global liquidity crunch, have weighed heavily on the bourses since 2008. FIIs outflow reached Rs 54,970.10 crore in calendar 2008, till 3 December 2008. Trading for the week started on a dull note as weak...

Although the key benchmark indices edged higher last week, the market sentiments remain fragile due to global recession worries and heavy selling by foreign funds this year. Global markets rallied after the US Federal Reserve cut its main policy rate to 1% on Wednesday, 29 October 2008 to stave off the credit crunch. China reduced rates earlier on Wednesday, 29 October 2008 with Taiwan and Hong Kong following up with rate cuts on Thursday, 30 October 2008. The Bank of Japan announced a 20 basis points cut in interest rate on Friday, 31 October 2008. Foreign institutional investors (FIIs) have been pulling out their investments from India and other emerging markets to shore up resources to beat the global liquidity crunch. In India, FII were net sellers of Rs 14272.40 crore in October 2008 so far (till 28 October 2008). FIIs have sold Indian shares amounting to Rs 51064.10 crore in calendar 2008. On the other hand, mutual funds have been buying. Their net inflow in October 2008 totaled ...

Global markets are more likely to influence the domestic bourses. Volumes may take a hit in the truncated trading week, as the market remains closed on Thursday, 30 October 2008, on account of Bhaubeez. On Tuesday, 28 October 2008, market will be open for just one hour from 18:15 IST to 19:15 IST for Muhurat trading to mark the beginning of the Samvat Year 2065. Global stocks tumbled to a new five-year low, last week, as investors withdrew from equity markets on worries that global economic slowdown may hurt corporate profitability. UK’s Gross domestic product dropped 0.5% between July and September, the first contraction in 16 years, the Office for National Statistics said today, 24 October 2008 in London. The official definition of a recession is two consecutive quarters of negative growth. Volatility is likely to remain high as derivative contracts for October 2008 series expire on Wednesday, 29 October 2008. As per reports, Nifty had seen 37% rollover of positions from October 2008...

Concerns about a Global Recession may continue to weigh on the domestic bourses, which have tumbled in a global equities rout in the past few days. Lack of buying support has accentuated the decline on the bourses Foreign institutional investors (FIIs) continue to press sales. They have sold shares worth Rs 46,661.20 crore in the calendar year 2008 so far (till 16 October 2008). Investors now await the Mid-Term Monetary Policy Review by the Reserve Bank of India (RBI) due on 24 October 2008. Some reports suggest that RBI is set to cut the repo (repurchase) rate by a steep 50 basis points, to signal a strong shift in policy focus to growth from inflation. Repo rate is the rate at which RBI provides funds to banks against the collateral of government bonds for a day to three days. On the inflation front, experts feel that the wholesale price index is expected to move downward, and will eventually come down to single-digit numbers by January 2009. Inflation based on the whole price index ...