Financial Daily from THE HINDU group of publications
Sunday, Mar 24, 2002
Financial Daily from THE HINDU group of publications Sunday, Mar 24, 2002 |
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Investment World
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Stock Markets Markets - Commentary Stock markets: On losing streak Krishnan Thiagarajan
THE stockmarkets continued their downward journey for the second successive week as political uncertainity marred the indices. The BSE Sensex declined by 101.57 points (or 2.80 per cent) to close for the week at 3516.11 points and decline in the international indices namely, the Dow Jones Industrial Average and Nasdaq Composite Index did not help matters. The markets were on the losing streak through the week except on Wednesday when it recorded marginal gains. Even though worries on Ayodhya appear to have receded for the moment, the political crisis brewing over this issue and the defeat of the POTO Bill in the Rajya Sabha has forced most players to remain on the sidelines. These political uncertainties have taken a toll on the foreign institutional investment this week. Amid this cloud of uncertainty, the only sector which remained immune to these developments was the pharma sector. Riding on company specific developments, stocks such as Wockhardt, Cipla, Dr. Reddy's Laboratories and Aventis recorded an appreciation in value during the week. The technology counters, specially, the frontline stocks remained depressed through the week. Across the board, all the leading technology stocks namely, Infosys Technologies, Wipro, Satyam Computers and Hughes Software declined in value. The Digital GlobalSoft stock declined in value on the backdrop of the uncertainity over the impact on its operations following the possibility of a merger of HP and Compaq at the international level. But a select band of second and third-rung software stocks bucked the trend and continued to attract heightened activity. Some of the major gainers were Aftek Infosys, D-Link, Tata Infotech and Polaris Software. Among media stocks, the prominent loser during the week was Zee Telefilms as the rumours on its possible tie-up with AOL Time Warner receded, although the management did indicate that it was in talks with global media majors, without specifying any names. In the wake of the political uncertainties, most of the prominent PSU stocks such as MTNL, GAIL, IPCL, HPCL and BPCL lost ground during the week. However, among PSU's, Hindustan Zinc proved to be a prominent gainer as the stock has witnessed two bidders namely Sterlite Industries and Indo Gulf Corporation entering the fray in bidding for a 26 per cent equity stake in the company. Among the petroleum majors, Kochi Refineries advanced during the week on indications that BPCL is proposing to merge Kochi Refineries with itself. Similar merger proposals by IOC involving the merger of Chennai Petroleum and Bongaigaon Refineries with itself lent some sparkle to the stockprice of the latter. International markets: The Dow Jones Industrial Average finally faltered on its 5 week winning streak by declining 1.7 per cent to close at 10427.67 points. However, the Nasdaq Composite Index continued its downward course for the second week, closing 0.9 per cent lower at 1851.39 points. The weakness is attributable to the beginning of the first quarter earnings announcement season.
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