India Insight

Markets this week: Sensex loses 2.7 percent, SBI falls 7.5 percent

Hurt by profit-taking in blue chips, the BSE Sensex posted its worst weekly decline since August as it lost 2.7 percent in a holiday-truncated week.

On Thursday, shares were hurt after ratings agency Standard & Poor’s said it will review the rating of Asia’s third-largest economy after the new government lays out its policy agenda next year. The agency’s outlook on rating remains negative.

However, Goldman upgraded its view on India to “marketweight”, with a Nifty target of 6,900 points. The investment bank noted optimism over political change is trumping economic concerns.

Here are the top Sensex losers and gainers of the week:

LOSERS

STATE BANK OF INDIA: After posting a near double-digit return last week, SBI was the worst Sensex performer in the week ending Nov. 8. The stock lost 7.5 percent ahead of earnings announcement on Nov. 13.

SBI, which accounts for about a quarter of all loans and deposits in India, revised its base rate by 20 basis points to 10 percent on Wednesday.

Equity mutual funds record best monthly performance since Jan 2012

India’s diversified equity funds posted their best monthly performance since Jan 2012 as the benchmark Sensex scaled record highs in October, with bets on sectors such as banking and capital goods boosting mutual fund returns.

Such schemes, which form the largest category of equity funds in India by number and assets, rose 9.2 percent on average, mirroring returns on the 30-share BSE Sensex, data from fund tracker Lipper, a Thomson Reuters company, showed.

The Sensex hit an all-time closing high in October — and went on to touch a life high on Nov. 1 ahead of the Diwali weekend — bolstered by foreign inflows of around $3.5 billion after the U.S. Fed decided to delay stimulus tapering.

Markets this week: Sensex falls 2.6 percent, Jindal Steel slumps 9 percent

After rising for four consecutive weeks, the BSE Sensex fell 2.6 percent in the last five trading sessions, as a surprise repo rate hike by the Reserve Bank of India (RBI) on Sept. 20 dampened investor confidence and battered banking shares.

Rate-sensitive sectors were hurt — the banking index and the realty index lost over 7 percent in the week. YES Bank fell 14.5 percent, SBI lost 6 percent while shares of DLF slumped 13 percent.

While analysts expected the new RBI chief Raghuram Rajan to hold rates last week, expectations for monetary policy have suddenly shifted towards further tightening after the rate hike, a recent Reuters poll showed.

Crisis of confidence? You must be joking!

Joke 1
Joe Blogger had a cheque returned last week. They said it was due to “Insufficient Funds.” Now, Joe’s not sure if they meant his account or the bank’s?

Joke 2
There are two sides to a bank’s balance sheet – the left side and the right side. On the left side, there is nothing right, and on the right side, there is nothing left!

My cell phone has been bombarded with forwarded jokes like the ones above ever since the global financial crisis started. At least some people have their sense of humour intact despite the troubled times. Some might even thank God for such small mercies.

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