Among market news in India, some IT stocks managed to end in the green despite a big selling week ended October 24. TCS led the weekly gainers on the Sensex, the benchmark of stock market in India, up nearly 8 per cent to Rs 490. Satyam gained over 7.8 per cent while Infosys rose nearly 4 per cent. The only other non-IT stock that ended among the gainers was ITC. In other stock market news from India, IT was only sectoral index on the BSE to end in the green for the week, up over 2 per cent.
Now the worst
market News, the realty index on the BSE for the week lost over 30 per cent while the metal index fell nearly 24 per cent. Even the bankex on BSE lost nearly 16 per cent, despite very little exposure to the global markets. The week ending October 24 was the fifth straight week of losses for the Indian stocks markets. And the capping the decline, on Friday, October 24, the Sensex lost 1070 points to close below the 9000 mark. From its peak in January, the Indian stock markets have lost nearly 60 per cent of its value.
The meltdown in the
indian stock markets has shifted the spotlight from the quarterly numbers. In market news in India, the results of the leading IT players are almost out. The numbers have been on expected lines. But the forecast from the leading players were not encouraging. Almost all of them cut their forecast, citing difficult global conditions.
As expected by India stock market, their bottom lines were affected some of their hedging losses. You cannot blame them for being caught on the wrong foot for their forex losses. Just at the beginning of the year, the rupee was appreciating and the Indian companies were caught off guard. Despite the weak forecast from the IT pack, JP Morgan remains bullish on these counters. TCS, Satyam and Infosys are among its top 3 picks. Among these three, Satyam is its top pick. However, the brokerage still sees further pressure coming from European BFSI sector. The cost cutting from the US clients will also weigh on the IT pack, it said.
In other forecast for the IT sector JP Morgan said though the environment remains uncertain, IT cost is not seeing any collapse in demand. IT further sees relatively good growth of 15 per cent for the IT industry in dollar terms in FY10. Other brokerages differ on their views on India’s IT pack. While Macquarie maintains an outperform rating on TCS, Goldman sticks to its sell rating. Goldman has cut TCS’s target by 3.4 per cent to Rs 540 per share. Macquarie has also lowered its target price on TCS by 29 per cent to Rs 750 per share.
Are we in sight of a bottom? Yes, probably in
India share markets. The few days of the Sensex was marred by panic selling. A market capitulation like situation is arising with heavy selling and investors rushing out to exit. This probably is a sign of market capitulation. The sheer volume of selling in frontline stocks is an example of this. These frontline stocks have shed weight even small caps would find hard to fathom. For the week ended October 24, M&M lost over one-third of its value. Tata Motors fell close to its one-third. Hindalco and DLF lost over 30 per cent each. Compounding the losses, as many as seven frontline lost one-fifth of their value. They include Tata Steel, Ranbaxy Lab, Sterlite Ind, Rel Infra, RIL, Bharti Airtel and ICICI Bank.
A sign that a bottom is nearby.
