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A maturing market amid the mayhem

Sensex sheds 0.4 pct, but gains 2.4 pct on week

March 20, 2009

MARKETS-SOUTHASIA-STOCKSThe Sensex ended 35 points lower on Friday on profit-booking ahead of the weekend.

The top benchmark losers included Tata Motors, which slipped 6.2 percent, ICICI Bank, which was down 4.5 percent, and L&T which lost 4 percent.

The BSE Realty Index slipped over 4 percent. Shares in Akruti City fell 27.8 percent and DLF ended 1.3 percent lower.

The Capital Goods Index (down 2.5 percent) and the Bankex (down 1.95 percent) were amongst the other sectoral losers.

The BSE Metal index however bucked the trend and rose 1.6 percent

Satyam slipped 1 percent in trade to close at 43.9 rupees. It was the third most traded counter on the BSE.

Despite closing lower today, the Sensex was up 2.4 pct on week. What’s your take on the Sensex target for next week?


Sensex did score another week of comeback by rising 210 points(2.40%).The sensex has covered 806 points(9.87%) since rally started on 12 March.The rally has been lead by Reliance Industries (9.87%) and ICICI Bank(16.04).As weekend was approaching,sensex decided to play easy.It just lost 35 points.
Hopefully,sensex should return on Monday fully rested and recharged.It appears that some momentum shall be visible,this time led by Reliance(KG gas is due on 1 April).The sensex may test 9,250 level during the week.

Posted by A.Kapoor | Report as abusive

What are your views about Akruti City — up 27.5 pct on Wednesday, up 10 pct on Thursday and down 27 percent on Friday. What’s going on?

Posted by Aditya | Report as abusive

Realty sector is surviving on ventilator system.The players are heavily leveraged,and do not have adequate cash=flows for servicing respective debts.Major realtors have have been forced by an adverse market sentiment to bring down prices,and have lately managed to get much needed sales. That dream margin of 50% to 60% have come down to some marginal costing. But that is unlikely to help unless companies are able to monetise their land banks.Prices paid for acquiring land post-December 2005 have actually halved in their valuations.There is an unadmitted asset- bubble in balance sheets.Moreover execution capability of players is a challenge.

The survival depends on how quickly companies are able to effect monetisation.A period post-June 2009 may see a kind of regrouping of existing players or new ownerships unfolding.

In light of an extremely unfavourable sector scenario,it is inexplicable how Akruti City had managed to rise from Rs.881(3 March) to Rs.2,227(19 March).

This company does own some quality land bank in jv with another player.The other partner was seen raising funds lately,and initial indication pointed to a possible monetisation.

Lastly, was there a price rigging?

Posted by A.Kapoor | Report as abusive

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