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The market displayed high
volatility through out the past fortnight as stock
prices swayed sharply in either direction driven by
global cues, particularly news related to the
proposed US bail out package of USD 700 billion.
The plan entails providing the
US treasury a sum of USD 700 billion for purchasing
bad assets, so that uncertainty would be reduced
regarding the worth of the remaining assets and
confidence in the
credit markets would be maintained. But
the plan did not get the nod of the United States
House of Representatives on 29th
September as opponents cited it’s not the optimal
solution to the problem. Next, the senate debated
and voted on a revised version of the bill which
would go for voting on the 3rd of October
as we prepare this report.
Some positive cues from the
global front came in the form of the India – US
nuclear deal securing approval of the U.S. Senate.
Select companies in the capital goods and
infrastructure space would benefit from the
development.
Inflation based on the whole
sale price index came in at 11.99 per cent for the
week ended 20th September,2008. It
declined compared to the previous week’s figure of
12.14 per cent. The decline in inflation has been
more than expected and this would give some room to
the central bank to keep interest rates unchanged
when it meets at the end of the month.
The market is looking forward
to the Q2 FY09 results season. It is being estimated
that earnings growth might have taken an adverse hit
during the quarter.
Companies which utilize metals
and commodities as their prime input could see an
improvement in their margins on account of a
considerable fall in prices of commodities and
metals from peak levels.
In the near term the market is expected to be range
bound with a downward bias. Global cues would
continue to play a decisive role in determining the
market direction. |
