The stock market news of the last week is not encouraging at all. The benchmark market indices ended with losses last week. For the week ending January 23, BSE 30’s Sensex stock fell nearly 7 percent or 649 points to finish at 8,674 points. Ingenious, the broader benchmark of the stock markets also fell 5.3 percent. It closed 5.3 percent lower for the same week. The decline was led by negative signals from global markets. US markets felt nervous even as Obama took office as the 44th president of the United States last week. Investors became cautious when reports revealed that measures taken by Obama to stimulate the economy would take time to produce results.
The Dow Jones lost 2.5 percent in the week ending January 23 amid growing fears about the worsening recession and concerns about the US banking industry. Investor mood turned more bearish after John Thain resigned from Bank of America. The Nasdaq, which primarily comprised tech stocks, lost 3.4 percent for the week, largely because Microsoft’s earnings beat market expectations. The software giant also announced huge layoff plans that further clouded investor sentiments. Wall Street’s broader index, the S&P 500 also closed down 1.4 percent last week. Asian markets, reflecting trends in the US and European markets, ended sharply lower for the week. Hong Kong’s benchmark Hang Seng index fell 5.1 percent to 12,578 levels. Japan’s Nikkei index also lost 6.7 percent to 8,230 levels.
South Korea’s key benchmark index closed at 1,135 levels, down 3.7 percent. Traders around the world expected a recovery in the markets, around January 20, that is, the day of Obama’s inauguration. But that did not happen. The sudden drop, once again, in world markets is due to new fears about the global recession. Experts are now warning that the slowdown could last longer than expected. Stock market traders around the world are now debating whether markets could hit October lows again. Coming to the Indian stock market now. In the last week, rate-sensitive counters were completely eliminated. The BSE real estate index lost 12.2 percent. It ended at 1,723.76 and was one of the worst results among the EEB sector indices.
In real estate, Unitech continued its journey south and closed at Rs 26, shedding more than 10 percent on a weekly basis. DLF was hit and the dash fell 17.5 percent to 161 rupees. The banking index was another big loser among the BSE sector indices. In the week ending January 23, it ended at 4,484, down nearly 11 percent. In the banking segment, ICICI Bank slumped 14 percent. The dash ended at Rs 364. Another interest rate sensitive sector, the automobile, took a heavy hit during the week. The BSE auto index lost 7.1 percent for the week. These counters will turn heads once the Reserve Bank of India announces another round of rate cuts.
