Echoing similar sentiments, Jagannadham Thunuguntla, head of the capital markets arm of India’s fourth largest share brokerage firm, the Delhi-based SMC Group said: “You can price risk and include this in your calculations, but you cannot price uncertainty, so decision-making is difficult in these unprecedented times.”

1. Key equities index ends green but jitters continue
Bombay News.Net
Monday 20th October, 2008 (IANS)
Mumbai, Oct 20 (IANS) A key Indian equities index ended in the green Monday after showing great
volatility during the day but continued selling by jittery investors saw midcap and smallcap stocks finish
with lossess.
At the close of trading, the sensitive index (Sensex) of the Bombay Stock Exchange finished at 10,223.09,
up 247.74 points or 2.48 percent from its previous close Friday at 9,975.35 points.
The Sensex opened at 10,160.47 points, rallied to touch an intra-day high of 10,538.05, a gain of 562.7
points or 5.64 percent against its previous close before sliding again.
With the markets sliding for three successive days last week, the stage was set for short sellers to book
profits, which could be one of the reasons the Sensex rallied initially and still end in the green despite the
undercurrent of negative sentiment, analysts said.
At the National Stock Exchange, the broader 50-share S&P CNX Nifty index also showed a similar trend
- opened strong, rallied and then dipped even below its previous close Friday before recovering again to
end in the green.
At close of trading, the Nifty was at 3,122.80, up 48.45 points or 1.58 percent from its previous close
Friday at 3074.35 points.
The Nifty had also moved up by more than 250 points before sliding.
Although the Sensex ended in the green, both midcap and smallcap stocks finished with losses, reflecting
the lack of depth in the positive sentiment.
The BSE midcap index closed at 3,506.35, down 38.49 points or 1.09 percent from its previous close
Friday at 3,544.84 points.
The BSE smallcap index finished at 4,112.82, down 55.04 points or 1.32 percent from its previous close
Friday at 4,167.86.
“There is far too much uncertainty and it is very difficult to say what the short term trend is going to be,”
said Ashish Kapoor, chief executive officer of Delhi-based brokerage firm Invest Shoppe India Pvt Ltd.
“Normally, such times are good for buying stocks but this time it is a deep hollow and with the largest
economy in the world, the US, going into a tailspin it is better to hold on to cash and wait and watch
before taking any decision,” Kapoor added.

2. Echoing similar sentiments, Jagannadham Thunuguntla, head of the capital markets arm of India’s
fourth largest share brokerage firm, the Delhi-based SMC Group said: “You can price risk and include
this in your calculations, but you cannot price uncertainty, so decision-making is difficult in these
unprecedented times.”
The analysts said that the fact that midcap and smallcap stocks had ended in the red indicated that there
was no depth in the recovery and whatever rally took place was only because of short covering.
“There is still no confidence in the market and no one is willing to lend or invest,” said Gautam
Mazumdar, chief underwriting officer of HDFC ERGO General Insurance Co. Ltd.
Information technology, technology, media and telecommunication (TMT), bank and fast moving
consumer goods stocks were the major gainers.
Realty, power, capital goods and automobile stocks were the major losers.
Among the major gainers were TCS Ltd, which gained 9.47 percent, Wipro Ltd up 8.95 percent, Satyam
Computers up 8.67 percent and Infosys Technologies up 7.92 percent.
The big losers were BHEL shedding 8.24 percent, Grasim Industries losing 7.96 percent, DLF Ltd down
6.40 percent and ACC Ltd losing 6.13 percent.
Reflecting the lack of depth in the recovery, only 920 or 35.17 percent stocks advanced, as many as 1,643
or 62.81 percent stocks declined and 53 remained unchanged.
“Despite the various measures being taken by central banks all over the world, there is still no confidence
or enthusiasm in the market,” Thunuguntla pointed out.
On Monday the Indian central bank, the Reserve Bank of India (RBI) cut the repo rate - the rate at which
the it lends to other banks - by 100 basis points to 8 percent, but there was little impact on the markets.
“Even now, the repercussions are trickling in with Hungary now seeking the help of the International
Monetary Fund and the European Central Bank even as the Dutch government made an infusion of $14
billion into ING Bank,” Thunuguntla said.
“If anybody still wants to buy in this market, it should be very staggered and only in those blue chips,
perhaps sensex component stocks, that have very low debt on their books and are well protected against
recession in most markets,” Kapoor said.