Equity Market Update
Markets gave a knee jerk reaction to the credit policy & recovered swiftly to close the derivatives expiry week with over 2% gains in benchmark indices. IT index gained more than 5% this week. Positive global cues helped the pull back rally and hope of fast track reforms process brought the PSU and banking stocks back in limelight. Overseas investors were net sellers, whereas the domestic investors were net buyers for the week.
Outlook for the week
Global commodity prices have shown signs of correction in the recent past, thus acknowledging a weak global growth outlook. Fresh credit write downs have necessitated further capital raising indicating that the worst is not over. We expect the equity markets across the globe to remain range bound in short to medium term, in the light of high commodity prices and sub-prime related issues.
Quarterly numbers from Indian companies have not given any major negative surprises. Overall top line growth has been robust, although operating margins have declined. Post result corporate interaction indicates continued optimism amidst a challenging environment. We believe the India growth story is here to stay; though there can be some volatility & uncertainty in the short to medium term.
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