Markets Recover On SBI Results

After opening on weak note today, the Indian markets recovered all of their losses post the announcement of SBI's Q4 results, which came in better than the street's expectation. The Sensex and Nifty are both marginally up by 0.20%. The rupee also recovered by 40 paise, and is trading at 54.38 against the dollar, helping the markets to gain positive momentum. Most of the sectoral indices are continuing to trade in the negative territory, reflecting broad-based selling pressure across the sectors. The Auto index has taken the greatest beating, and has extended the losses to 3.11% at this hour. However, others like Bankex, Oil & Gas and FMCG have turned positive at this hour.

The European markets also continue to remain weak, and have opened in the deep red zone. The week has witnessed the highest weekly decline since Nov 2011. Investors seems to be concerned over the weakening European region and the still-unresolved debt crisis. Moody’s downgraded rating for most of the Spanish banks added to the investors' concerns. The major European indices, FTSE, CAC and DAX, are trading lower by 1.12%, 1.09% and 0.80% respectively.

Asian markets too extended their losses, and witnessed a similar downfall between 1%-3% amid worries over slowing global growth and a deepening Euro zone crisis. Nikkei has fallen by 3% to log the seventh straight week of losses, the longest such run since the third quarter of 2001. Major selloff of stocks and other risky assets by investors plunged the market to its lowest levels.

Among individual stocks, SBI is up by 3.5% on the back of its Q4 results announcement. The net profit of the company stood at Rs 4050 crore against that of Rs 20 crore in the same period last year and also above the street's estimate of Rs 3580 crore.

Investors have not responded to the Specialty Restaurants IPO that is currently open. The subscription is below 1%, and today is the last day of the offer. This has suggested that investors may remain bearish on the primary markets until the valuations of the IPOs become attractive. This may be the third IPO to get hit by the investors’ negative sentiment.

The market breadth, which indicates the overall health of the market, is very weak. On the BSE, 1603 shares fell and 832 shares rose. 128 shares remained unchanged.

In conclusion, we expect the markets to remain volatile for the rest of the day and advise readers to play with caution.