The Real Picture

Though the Indian economy is showing some signs of revival in terms of IIP and improved trade balance numbers, these factors have had no positive impact on the bourses. The market shunned all the positive stimuli and overly focused on the US taper talks and the declining rupee to tumble from its peak.

The BSE Sensex has been on a continuous downslide following global cues, and has failed to see any revival since November 3, when it touched its historical peak of 21321 points. The current downturn started soon after Diwali, when better US job data indicated sooner-than-expected tapering of the QE3 stimulus, putting substantial pressure on the rupee. The market has failed to recoup from that shock. This clearly giving us a feeling that the festive euphoria enveloping the markets has also all but dissipated.

In the last fortnight, the markets were in a turbulent phase. BSE Sensex opened strong at 20944 points on October 30 but shed points at regular intervals in the sessions that followed. The Sensex touched the lowest level of 20262 on November 12 before closing at 20281, losing 662 points over the past 15 days. Along similar lines, the NSE Nifty opened at 6230 on October 30 and declined continuously since then to touch the lowest level of 6011 before closing at 6018 on November 12, losing 212 points in the period. However, the Nifty did see a historic high of 6342 in the last fortnight (November 3).

As far as the FIIs are concerned, the story has somewhat reversed, as they purchased heavily while mutual funds went on a selling spree. Since October 31, FIIs bought with full confidence, purchasing stocks worth Rs 1843 crore in 15 days. In fact, until November 11, there wasn’t a single day when they were net sellers. On the other hand, Indian mutual funds were exactly doing the reverse, with a net sale of Rs 946 crore. In combined terms, the BSE and NSE saw a turnover between Rs 12873 crore and Rs 13786 crore.

As far as global indices are concerned, the slowdown across the world seems to be taking a toll. All the indices barring the US Dow, Germany’s DAX and Hang Seng saw depreciation, with South Korea’s Seoul Composite leading the decline at 3.78 per cent. Brazil’s Bovespa, Taiwan Weighted, Shanghai Composite and Japan’s Nikkei declined by 3.51, 2.93, 1.56 and 1.35 per cent respectively. On the other hand, Germany’ DAX and US Dow appreciated marginally by 0.86 and 0.65 per cent respectively.

In individual stocks, 1261 appreciated and 53 remained unchanged. As far as the gainers are concerned, Aurobindo Pharma was the biggest gainer with a 24.46 per cent rise, followed by Indian Bank, Bank of India, Torrent Power and Divis Labs, which went up by 24.08, 22.67, 17.53 and 17.23 per cent rise respectively. The counters that saw losses in the fortnight include United Breweries, Prestige Estates Projects, Suzlon, Axis Bank and Financial Technologies, which declined 20.67, 15.25, 14.90, 14.15 and 13.35 per cent respectively.

From the current situation, it seems quite likely that the current downturn will continue for some more time, as there is a lot of uncertainty prevailing both on the domestic as well as global fronts. The Assembly elections are around the corner, and will leave very marginal space for any improvement in sentiment. Operators and investors are both keeping themselves away from active participation in the markets. This gives us a feeling that the two months ahead would be sober as far as action on the bourses is concerned.