Markets Awaiting Reforms
Suparna / 26 Jul 2012
While pessimism has taken a firm grip of the market thanks to the not-so-encouraging corporate results of India Inc., the inflows from FIIs are really encouraging. With the Presidential election going in favour of the UPA and no elections nearby, reforms are likely to take a front seat.
The commencement of the earnings season is marked by Infosys declaring its results. For the last two consecutive quarters, the guidance provided by the company has been a bit subdued. The guidance provided this time too did not go down well with investors, resulting in the BSE IT Index declining by 7.70 per cent over the last fortnight. This index has been the worst performer in the last fortnight, followed by BSE Power (-6.89 per cent) and BSE Metals (-6.85 per cent). The results declared so far also do not show any signs of encouragement that may act as a trigger going forward.
| Index | 25-Jul-12 | 11-Jul-12 | % Change |
|---|---|---|---|
| Sensex | 16846.05 | 17489.14 | -3.68 |
| S&P CNX Nifty | 5109.6 | 5306.3 | -3.71 |
| BSE - 100 Index | 5123.42 | 5321 | -3.71 |
| BSE - 200 Index | 2078.86 | 2156.54 | -3.6 |
| BSE - 500 Index | 6511.39 | 6750.12 | -3.54 |
| NSE - CNX 100 | 5009 | 5196 | -3.6 |
| NSE - CNX 500 | 4062.4 | 4210.65 | -3.52 |
Out of the 13 sectoral indices, only the two that are considered to be safe havens, viz. the BSE FMCG and the BSE Healthcare index managed to close in the green.
| Index | 25-Jul-12 | 11-Jul-12 | % Change |
|---|---|---|---|
| BSE Mid-Cap | 6066.29 | 6298.96 | -3.69 |
| BSE Small-Cap | 6555.87 | 6789.08 | -3.44 |
On the global front, there has not been any good news that would give out some positive vibes. In the last fortnight, the US remained flat, Europe went down by around two per cent and the Japanese Nikkei ended down by more than five per cent.
While pessimism has taken a firm grip of the market thanks to the not-so-encouraging corporate results of India Inc., the inflows from FIIs are really encouraging. FIIs have been continuously buying into Indian equities since April 2012. In the first quarter alone, they pumped more than Rs 6000 crore into equities. Also, with the Presidential election going in favour of the UPA and no elections nearby, reforms are likely to take a front seat.
We suggest that our readers remain cautious and start accumulating stocks in a staggered manner.
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