India Stocks Outlook: Subdued next wk; fate of US bailout deal eyed
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B. Karthick
Sep 27, 2008, 12:01:53 AM9/27/08
to Kences1
India Stocks Outlook: Subdued next wk; fate of US bailout deal eyed
Saturday, Sep 27
Uncertainty over the fate of the $700-bln U.S. bailout package for
the financial sector will continue to weigh on local share indices
next week.
At the moment the only factor that will dictate terms is outcome
of the U.S. bailout package plan. There are already rumours the
outcome may not favourable to the market. If that happens, then Sensex
will test 12,500 levels.
If the outcome of the bailout package is favourable, then short
covering might emerge at lower levels.
Even if they come out with the $700-bln package, the market will
react positively as a knee-jerk reaction, but the pain is still there
as the effect of the bailout will not happen immediately.
Yesterday, Share indices ended down over 3% as the U.S. bank
bailout package--aimed at restoring credit markets--seems to have run
into trouble.
Sensex ended at 13102.18, down 445.00 points, or 3.3%, from
Thursday. Nifty closed at 3985.25, down 125.30 points, or 3.1%.
Investors would also remain cautious and avoid taking fresh
positions ahead of the Jul-Sep results season, which begins with
Infosys Technologies' earnings announcement Oct 10.
Whatever bad things that have occurred in the last two-three
months, like surge in (global) crude oil prices, rupee depreciation,
decline in commodity prices, inflation and interest rate peaking, will
reflect in the Jul-Sep results.
Support for Sensex at 12200 and Resistance at 13700.
Among rate-sensitive sectors, real estate is likely to remain
subdued in the coming week on lack of positive triggers in the near
term.
Realty shares are likely to witness a sharp correction soon and a
bounceback is also not sees sustainable.
Investors are also wary of shares of information technology firms
as their business prospects are hanging in the balance due to
worsening financial scenario in U.S.
Valuations are attractive for these companies. The negatives are
already factored in the prices, but one should wait till Infosys
results to take positions in the sector.
B.Karthick
Research Analyst.
Saturday, Sep 27
Uncertainty over the fate of the $700-bln U.S. bailout package for
the financial sector will continue to weigh on local share indices
next week.
At the moment the only factor that will dictate terms is outcome
of the U.S. bailout package plan. There are already rumours the
outcome may not favourable to the market. If that happens, then Sensex
will test 12,500 levels.
If the outcome of the bailout package is favourable, then short
covering might emerge at lower levels.
Even if they come out with the $700-bln package, the market will
react positively as a knee-jerk reaction, but the pain is still there
as the effect of the bailout will not happen immediately.
Yesterday, Share indices ended down over 3% as the U.S. bank
bailout package--aimed at restoring credit markets--seems to have run
into trouble.
Sensex ended at 13102.18, down 445.00 points, or 3.3%, from
Thursday. Nifty closed at 3985.25, down 125.30 points, or 3.1%.
Investors would also remain cautious and avoid taking fresh
positions ahead of the Jul-Sep results season, which begins with
Infosys Technologies' earnings announcement Oct 10.
Whatever bad things that have occurred in the last two-three
months, like surge in (global) crude oil prices, rupee depreciation,
decline in commodity prices, inflation and interest rate peaking, will
reflect in the Jul-Sep results.
Support for Sensex at 12200 and Resistance at 13700.
Among rate-sensitive sectors, real estate is likely to remain
subdued in the coming week on lack of positive triggers in the near
term.
Realty shares are likely to witness a sharp correction soon and a
bounceback is also not sees sustainable.
Investors are also wary of shares of information technology firms
as their business prospects are hanging in the balance due to
worsening financial scenario in U.S.
Valuations are attractive for these companies. The negatives are
already factored in the prices, but one should wait till Infosys
results to take positions in the sector.
B.Karthick
Research Analyst.
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