It was a three day trading week and markets were battered. The reason which is not palatable was the minutes of the Fed meeting that rate increase is almost likely in the next meeting. How does it matter if rates which are at unsustainable base of a mere 25 basis points are doubled? If India and its markets have the potential to grow would a 25 basis points really matter?
The BSESENSEX lost 387.54 points or 1.38% to close at 27,673.60 points while NIFTY lost 114.20 points or 1.31% to close at 8,583.40 points. Results from TCS and Infosys saw TCS margins improving and revenue dipping while Infosys reduced guidance for the remaining half of the year. In an otherwise weak markets these shares held themselves and BSEIT actually gained 0.72%.
The long awaited deal of Essar Oil has finally been done. The Essar group has sold almost all of the refinery and Vadinar Port to a group of three investors led by Rosenoft. The entire deal is worth about Rs 86,000 crs and includes taking over of existing debt as well. Two good things would happen as a result of this deal. Firstly the Indian banking system starved of funds would get about Rs 50,000 as repayment and second the shareholders of Essar Oil would get some more money for the shares held in Essar Oil.
Results season has begun and companies declaring results would be in focus going forward. Markets have lost their momentum in the crack last week and would need to consolidate before the next up move could begin.
One should use rallies to exit na d wait for better opportunities to re-enter the market post Diwali and result season.