A bear market is one that cannot rise even on good news, while a bull market is one that can easily shake off bad news. For now, the
former seems to hold true of the markets, where any news is perceived to be bad news. Despite the shakeups in the Euro zone, nothing seems to have worked in favour of the market sentiment over the past fortnight. Trading with a negative bias, the broader markets ended almost four% down, with the Sensex losing 690 points and the Nifty declining 228 points over the fortnight (between 2nd November and 15th November).
|Index ||16-Nov ||2-Nov ||% Change |
|Sensex ||16,775.87 ||17,464.85 ||-3.94 |
|S&P CNX Nifty ||5,030.45 ||5,258.45 ||-4.34 |
|BSE - 100 Index ||8,682.89 ||9,091.04 ||-4.49 |
|BSE - 200 Index ||2,032.73 ||2,132.07 ||-4.66 |
|BSE - 500 Index ||6,368.99 ||6,693.54 ||-4.85 |
|NSE - CNX 100 ||4,902.20 ||5,133.85 ||-4.51 |
|NSE - CNX 500 ||3,965.45 ||4,171.40 ||-4.94 |
The weakness seems to be widely spread, with almost all the broader indices having ended in the red, and this is also true of stocks of all sizes. In fact, Mid- and Small-Cap stocks have performed even worse than their larger counterparts. The BSE Mid-Cap Index ended 6.43% down, while the BSE Small-Cap Index was down by a whopping eight% over the fortnight.
FMCG is the only sector where there seems to have been some amount of optimism. The BSE FMCG Index (up 0.33%) was the only one among the sectoral indices to have ended in the positive over the fortnight. All the others ended in the red, Realty and Consumer Goods being the worst performers. The BSE Realty Index ended at the bottom of the heap, with an 11% decline, while the BSE Consumer Goods Index was down 9.27%. Banks, metals and power were among the other weak performers
over the fortnight. IT stocks seem to be holding up for some reason.
This is a trend that has been witnessed over the past couple of fortnights. The BSE IT Index ended the fortnight down by only 1.34%, followed closely by the BSE Healthcare Index, which declined 2.40%. All the others were down an average six% over the fortnight.
Institutional activity is throwing up some positive vibes. FIIs ended the fortnight with a net buying of Indian equities worth USD 378
million, while Indian mutual funds played contra to their foreign counterparts as usual, having sold net equities worth `202 cr over the fortnight.
International markets saw a relatively calmer fortnight, as can be seen at least from the end-to-end performance of the key indices. Except for the Japanese Nikkei, none of the others were in the red. The Dow Jones Industrial Average gained 2.20%, while the Shanghai Composite was up 1.02%. Europe, where most of the bad news is currently emanating from, was actually in the black.
The FTSE ended the fortnight gaining 0.61%.
What has put the markets under pressure are the Q2 numbers of India Inc. Some media reports have already dubbed it a ‘Sad September’ for corporate India. Why have the numbers been so bad? Well, the reasons were already there for all to see much before
the actual results proved the case in point – rising interest rates, a declining rupee, inflation, et al. In fact, it is increasingly becoming painful to discuss the same reasons over and over again and yet not have discussed them enough.
What lies ahead? It is better to wait and watch, and not speculate about what will happen to the markets over the next fortnight. For now, we know all that can probably go wrong with the market, don’t we? Or else...