Technical Report - Sep 25 2011
Sunday, September 25, 2011
Markets slumped in the latter half of the week, after the US Federal Reserve's statement renewed fears of a double-dip recession in the US. Also, the Fed's proposed new package, termed as 'Operation Twist', to buy long-term bonds and sell short-term bonds worth $400 billion did not inspire any confidence in investors worldwide.
The market slumped last week, snapping a 3-week rally, as fears of weak Q2 September 2011 corporate earnings, a further slowdown in China's manufacturing sector and Federal Reserve's assessment that the US economy faces significant downside risks rattled investors. Key benchmark indices fell in four out of five trading sessions during the week.
The BSE Sensex slumped 771.77 points or 4.56% to 16,162.06 in the week ended Friday, 23 September 2011. The S&P CNX Nifty tumbled 216.50 points or 4.25% to 4,867.75.
Fears of weak Q2 September 2011 results may continue to weigh on Indian stocks, which witnessed a steep slide recently. Volatility is expected to rise as traders roll over positions in the futures & options (F&O) segment from the near-month September 2011 series to October 2011 contracts. The September 2011 derivatives contracts expire on Thursday, 29 September 2011.
Nearly a quarter of top 100 companies have paid lower advance tax in Q2 September 011, reflecting the slowdown in growth and pressure on margins because of rising input costs and higher interest rates. The advance tax payment by top 100 companies rose a modest 9.9% in Q2 September 2011 from a year ago against 19% growth in Q1 June 2011, suggesting corporate profit growth is likely to be muted in the second quarter.