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Indian markets to get recovery dose on European hopes

11 Nov 2011 Evaluate

The Indian markets suffered sharp cuts in previous session, mainly dragged by the banking stocks on rating downgrade and prevailing global pressure. Today, some recovery can be expected after a day of break and the indices are likely to make a positive start on supporting global cues. The banking stocks too may recover as after the Moody’s lowered the outlook on the Indian banking sector, another rating agency Standard & Poor’s on Thursday moved it a notch higher in the Banking Industry Country Risk assessment (BICRA), a tool to evaluate and compare global systems, however its nothing to do with the performance of the banks. A BICRA analysis covers rated and unrated financial institutions that take deposits, extend loans or undertake both. It covers banks as well as non-banking finance companies that do not accept deposits. On the same time the telecom stocks are likely to be under pressure as the TRAI has reported that the minutes of usage (MOU) per subscriber for GSM services declined by 1.45 percent during the first quarter ended June 30 at 344 as against 349 during the previous quarter. The average revenue per usage for GSM services too declined by 2.55 percent to Rs 98 during the quarter under review as against Rs 100 during the previous quarter.

Also, there will be lots of result based movements to keep the markets buzzing. Adani Power, Anant Raj Inds, Britannia Inds, Dredging Corp, Educomp Solutions, Financial Technology, Gammon India, Mundra Port, Lanco Infra, Jet Air India, Spicejet, REI Agro, Reliance Capital, Shree Renuka Sugar are among the many to announce their numbers today.

The US markets bounced back on Thursday on improved eurozone mood as Greece named a new leader and Italian bond yields dropped on hopes of a political resolution in Rome. The Asian markets have made an enthusiastic start on hopes of resolution to the European crisis after Italy managed a successful offering of debt securities.All the major indices are trading higher by half to one percent.

Back home, Indian stock markets capitulated by over a percent on Wednesday after showing signs of consolidation in last four sessions as discouraging global leads spooked investors’ sentiments in the dying hours of trade. Despite beginning the session on a positive note and trading in a tight range for most part of the session, the key gauges failed to snap the session in the positive territory. The benchmark indices suffered hefty bouts of profit booking especially in rate sensitive counters. The optimism over Italian Prime Minister Silvio Berlusconi’s vow to resign after crucial austerity package aimed at calming Euro-zone turmoil are approved this month, evaporated by the end. The late hour selling came on the back of the sharp surge in Italian bonds yields which rose above 7% and also because European markets nosedived after a short-lived rally. Back home, sentiments were undermined as investors squared off hefty positions from the rate sensitive Banking counter which plummeted by over two and half a percent on reports that Moody's slashed its outlook for India’s banking sector to ‘negative’ from ‘stable’. The global rating agency downgraded the Banking sector citing concerns that slowdown in domestic and international economic activities are affecting the asset quality, capitalization and profitability of banks in the counting. Furthermore, investors punished banking heavyweight SBI which got butchered by close to four percent post its second quarter earnings announcement, on reporting a steep rise in non-performing assets for the quarter. Meanwhile, the data released by SIAM showed that India’s car sales registered the steepest plunge in more than a decade in October, owing to a sharp drop in production from Maruti Suzuki, rising borrowing costs and spiraling fuel prices. Earlier on Dalal Street, the benchmark got off to a positive start in the morning trade, however they failed to capitalize on the initial momentum and continued to see-saw around the neutral line for most part of the day. But just when it appeared that the frontline indices would extend their consolidation phase for the fifth session in a row, hefty position squaring in most sectors ensured that the indices settle with large cuts. Moreover, the broader markets too succumbed to the selling pressure evident in their larger peers and plunged by over a percentage points. On the BSE sectoral space, the Bankex index remained the top laggard in the space and settled with over two and half percent cuts followed by the Metal pocket which too went home with similar losses. But the defensive FMCG sector remained the top gainer in the space with over a percent gains. Finally, the BSE Sensex shaved off 207.43 points or 1.18% to settle at 17,362.10, while the S&P CNX Nifty plunged by 68.30 points or 1.29% to close 5,221.05.

The US markets recovered from the sharp slide of previous session and closed higher on Thursday after getting good jobs data and on hopes that Italy’s problem will be resolved. The Labor Department reported that new claims for unemployment benefits dropped 10,000 to a seasonally adjusted 390,000 versus a revised 400,000 the prior week. In Europe, Italy sold $6.8 billion worth of debt at rates that were more favorable than expected and there was a buzz that economist Mario Monti is likely to replace Premier Silvio Berlusconi.

The Dow Jones industrial average was up by 113.07 points or 0.96 percent, to 11,894.01. The S&P 500 gained 10.59 points, or 0.86 percent, to 1,239.69, while the Nasdaq ended higher by 3.50 points, or 0.13 percent, to 2,625.15.

SEBI Registered: Investment Adviser - INA000013323

Name of the IA registered with SEBI:	The Alchemists Ark Pvt. Ltd.
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Trade/Brand Name of IA:	MoneyWorks4Me Investment Advisers
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SEBI Registration Number:	INA000013323 Validity - May 16, 2019 - Perpetual
Registration:	Non-Individual
BSE Enlistment No:	1187
Address:	B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045
Compliance officer Details:	Name: Shrikant Jagtap Email: shrikant.jagtap@moneyworks4me.com Telephone: +919860359463 Address: Same as IA
Grievance Officer Details:	Name: Mukta Vaze Email: mukta.vaze@moneyworks4me.com Telephone: +91 98609 19463 Address: Same as IA
Principal Officer Details:	Name: Atharva Bhide Email: atharva.bhide@moneyworks4me.com Telephone: +91 91758 99463 Address: Same as IA
Standard Warning:	Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Disclaimer:	Registration granted by SEBI, enlistment with exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

Warning: Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Disclaimer: Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee performance of the intermediary or provides any assurance of returns to investors.

Compliance Officer:

Name: Shrikant Jagtap

Email: shrikant.jagtap@moneyworks4me.com

Mobile No: +91 97638 00745

Grievance Officer:

Name: Mukta Vaze

Email: mukta.vaze@moneyworks4me.com

Mobile No:+91 98609 19463

Principal Officer:

Name: Atharva Bhide

Email: atharva.bhide@moneyworks4me.com

Mobile No:+91 91758 99463

SEBI regional/local office address -

Plot No. C 4-A , G Block, Near Bank of India, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra 400051

Address:

The Alchemists Ark Pvt. Ltd., B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045

Data provided by Accord Fintech Pvt. Ltd.

*Color code for outperformance consistency

*Number is average 3 year rolling returns

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