Mar­ket View

Dalal Street Investment Journal - - CONTENTS -

Fi­nally, we see a mean­ing­ful drop in share prices af­ter an eight­month steady rise in In­dia. The cor­rec­tion may con­tinue, as per mar­ket pun­dits, and the more it cor­rects, the more at­trac­tive the stocks start look­ing.

The In­dian mar­kets un­der­per­formed the US mar­kets, Ger­man DAX, French CAC 40 and Ja­panese Nikkie if we con­sider the past two weeks. In fact, Nikkie was the best per­form­ing in­dex in the past cou­ple of weeks as the in­dex gained more than 4 per cent for the pe­riod un­der con­sid­er­a­tion.

Dow Jones In­dus­trial Av­er­age was up by 1.08 per cent, DAX gained 0.96 per cent and CAC 40 was up by 1.75 per cent over the last 15 days. FTSE 100 strug­gled ow­ing to the UK down­grade by the Moody’s. S&P down­graded China and the eq­uity mar­kets in China strug­gled, which led to its un­der­per­for­mance.

Sen­sex slipped by 0.80 per cent and Nifty was down by 1.33 per cent in the past cou­ple of weeks. IT in­dex was the only sec­toral in­dex to trade in the green, with the in­dex gain­ing 1.05 per cent. Realty in­dex was the worst per­form­ing sec­toral in­dex and was down by nearly 9 per cent. Metal in­dex got pounded the most af­ter realty and was down by a whop­ping 6.22 per cent. Power, Bankex and FMCG in­dices were down by more than 2 per cent each.

The FIIS re­mained net sell­ers to the tune of Rs 10063.51 crore over the past cou­ple of weeks, while the DIIS con­tin­ued their buy­ing spree in the mar­ket and re­mained buy­ers to the tune of Rs 8427.07 crore. The heavy sell­ing from the FIIS was neu­tralised by the con­tin­u­ous buy­ing by the DIIS.

The FIIS seem to be with­draw­ing money from In­dian mar­kets and park­ing their funds in other emerg­ing mar­kets that are look­ing rel­a­tively cheaper.

The past two weeks saw list­ing of Ca­pacite In­frapro­jects and Mat­ri­mony. com. Ca­pacite In­frapro­jects saw huge re­sponse from the in­vestors but the list­ing gains were slightly be­low the ex­pec­ta­tion of the in­vestors as poor mar­ket sen­ti­ment pushed the stock prices down­wards on the first day of list­ing. Mat­ri­mony had a dis­ap­point­ing list­ing as the share got listed at a 8 per cent dis­count to its is­sue price. The up­com­ing weeks will be abuzz with IPOS of SBI Life In­sur­ance and ICICI Lom­bard Gen­eral In­sur­ance Com­pany Ltd.

Mar­kets may have taken sup­port near the 9720 level in the short term, but the prob­a­bil­ity of mar­kets slid­ing fur­ther down can­not be ruled out. The only sil­ver lin­ing is the DIIS buy­ing in­ter­est in the mar­kets and their ap­petite for small and mid-cap stocks.

The FIIS seem to be with­draw­ing money from In­dian mar­kets and park­ing their funds in other emerg­ing mar­kets that are look­ing rel­a­tively cheaper.

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