Barely holding ground

Not much momentum was witnessed in the markets last week. The Sensex,which ended the week at 8,891....

Written by Niti Kiran | Published:March 2, 2009 11:25 pm

Not much momentum was witnessed in the markets last week. The Sensex,which ended the week at 8,891.6,was up marginally by 0.5 per cent compared to the previous week. Last week,the government announced a reduction in excise duty from 10 per cent to 8 per cent and in service tax rate from 12 per cent to 10 per cent. The poor GDP number announced last Friday added to the mood of gloom in the markets. The third quarter GDP growth figure of 5.3 per cent was far below the market’s expectation. Inflation dropped marginally by around 0.6 percentage points and stood at 3.36 per cent for the week ended February 14. It was 3.92 per cent in the previous week. The rupee plunged to a record low and closed at Rs 51.1 per dollar. It depreciated nearly 2.4 per cent during the week. It has tumbled 22 percent vis-a-vis the dollar in the past 12 months.

Among sectoral indices,auto and information technology registered the maximum gains of 5.4 per cent and 2.8 per cent respectively during the week. “The auto sector gained on the back of selective buying. The cut in excise duty will help the sector grow. In the information technology space,the fall in the value of the rupee vis-à-vis the dollar made the difference,” says Sonam Udasi,vice president,research and group head,Brics Securities.

The major losers during the week were realty and consumer durables,which declined by 2.8 per cent and 1.4 per cent respectively during the week. Udasi believes that sectors such as banking,which is a structurally decent sector,and companies in the FMCG sector such as Nestle and Colgate-Palmolive will do well in future.

The global markets are still trading under pressure. “The Indian stock market is expected to be range bound or remain negative for quite sometime as there are no triggers in the market,” says Udasi.

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