Monday, November 29, 1999

Markets slide below 17,000; correction possible

News posted by www.newsinfoline.com

The 30-share benchmark index, Sensex, has again slipped below 17,000-mark and closed at 16,994.6 points last Friday. However, on weekly basis the benchmark index is up 1.3 per cent compared with the previous week's closing. The index is currently trading at a price-to-earnings ratio of 19.9. The foreign institutional investors continued on their selling spree and pulled out nearly Rs 1,287.9 crore from equities last week. According to Kishor P Ostwal, managing director, CNI Research, "Concern on monetary tightening in China was a negative trigger for the markets whereas the efforts to resolve Greece crisis came as a comfort." The mid-cap and the small-cap index rose nearly 1.6 per cent and 1.2 per cent respectively during the week.Inflation bucked a two-week declining trend in late April as it marginally increased to 16.44 per cent for the week ended May 1, compared with the previous week. Gold, which is currently trading at Rs18, 315 per 10 gram, scaled almost 2.7 per cent during the week. Crude oil, on the other hand, was up 3.3 per cent and is currently trading at $79 per barrel (as on May 11).Among the sectoral indices, the major gainers were realty and auto that rose by 4.1 per cent and 3.7 per cent respectively during the week. "Growth in the realty space was due to the central bank's decision to ease oversees borrowing rules for infrastructure finance companies. On the other hand, auto sector was mainly driven by their decent Q4 results," says Ostwal. The major losers were consumer goods and metal. Both the sectors declined marginally by 0.2 per cent and 0.4 per cent respectively compared to the previous week's close. Ostwal expects markets to correct by 1 or 2 per cent in the coming week.

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