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Journalism of Courage
MUMBAI, July 27: The stock markets took further beating on Monday as a host of negative factors dampened the sentiment once again. Sensex fell by 86 points as speculators and foreign institutional investors FIIs unloaded shares on major stock exchanges.
The major factors which hit the sentiment are poor quarterly performance by companies, the weak trend in Asian markets, the rising inflation level and political fears. The fresh selling wave resulted in several scrips dropping below the 52-week low level. Domestic financial institutions led by UTI made considerable buying in select counters, but could not prevent the fall.
What has upset the calculations of marketmen is the sustained flow of poor quarterly performance by manyleading companies. The Hinduja group flagship, Ashok Leyland, had registered a loss of Rs 33.20 crore during the first quarter of the current financial year. Analysts expect Telco, the largest automobile company in the country, to come out with lower profits for the first quarter of the current year.
Tata Steel had already registered a 60 per cent drop in profits in the first quarter. 8220;This indicates that the economy is yet to get back on the rails,8221; said a fund manager. 8220;With the week ahead expecting results of bluechips like HLL and Fera companies the market could be expected to get some support from it. But the market is now distinctly weak and uncertain,8221; he said.
Kamal Sen, an economist with DSP Merrill Lynch said alarm bells should not start ringing just because the inflation rate had touched a certain level. quot;Moderate inflation is good for the economy but the question is up to what level is it moderate and when it becomes alarming.quot; Inflation crossed the 8 per cent mark this week.
ITC clockedthe highest turnover of Rs 180.56 crore of the total volume of business of Rs 812.59 crore. ITC dropped by Rs 9 to Rs 630, Satyam Computer Rs 7.50 at 483.50, Reliance Rs 2.90 at 130.80, SBI Rs 7.40 at Rs 194.60, Telco Rs 8.90 at Rs 117.30 and Tisco by Rs 3.70 to Rs 101 on selling pressure.
Significantly, FII buying has not picked up in the past week. 8220;At least the selling pressure from FIIs has subsided. Now the government needs to push through some key reforms like the Companies Act, IRA Bill and the Patents Bill. This way India can regain the confidence of foreign investors,8221; said an analyst.
