“It is too premature to say there is a definite bullish trend in the market,” said Jagannadham Thunuguntla, head of the capital markets arm of India’s fourth largest share brokerage firm, the Delhi-based SMC Group. “Just too much has happened in the last two months and investors are still shell-shocked and trying to understand the state of the global economy,” Thunuguntla said. He said although US markets surged Thursday, Asian markets have shed values Friday despite an interest rate cut Friday by the Japanese central bank to a near zero level of 0.3 percent from 0.5 percent earlier.

1. Indian equities surge, bounce back from bear excesses
Indian equities opened strong Friday and two hours into trading were showing signs of a sharp but
expected bounce back following the bear market excesses of the last few weeks, analysts said.
Sentiment was also helped by the big upswing in the US markets a day earlier following the cut in
the key interest rate by the US Federal Reserve to 1 percent, the lowest in the modern era.
The last time the key interest rate was cut to 1 percent was in 2000 after the bursting of the dotcom
bubble, analysts said, adding that the rate cut was anyway expected over the last couple of weeks
because the US Fed really had no other alternative.
The benchmark 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) opened at
9,361.66 points, up 317.15 points or 3.51 percent against the previous close at 9,044.51 points, and
soon surged ahead to hit a high of 9,859.25 points.
Some two and a half hours into trading, the key index was ruling at 9,661.01 points, up 616.50
points or 6.82 percent over its previous close.
The situation was no different at the National Stock Exchange (NSE) where its broader 50-share S
and amp;P CNX Nifty index was ruling at 2,847.25 points, up 150.2 points or 5.57 percent against its
previous close at 2,697.05 points.
The BSE midcap index was at 3,161.08, up 66.60 points or 2.15 percent from its previous close at
3,094.48 points.
The BSE smallcap index was at 3,756.84 points, up 82.23 points or 2.24 percent from its previous
close at 3,674.61 points.
Despite the upward rally, there is still little depth in the market as investors continue to be jittery,
especially now that the US Consumer Confidence Index announced Thursday has hit an all-time
low, analysts said.
The global financial problems were now definitely creeping into the real economy and it will take
some time before investors really come to grips with the situation, they said.
quot;It is too premature to say there is a definite bullish trend in the market,quot; said Jagannadham
Thunuguntla, head of the capital markets arm of India's fourth largest share brokerage firm, the
Delhi-based SMC Group.
quot;Just too much has happened in the last two months and investors are still shell-shocked and trying
to understand the state of the global economy.quot;
He said although US markets surged Thursday, some key Asian markets have shed values Friday
despite an interest rate cut Friday by the Japanese central bank to a near zero level of 0.3 percent
from 0.5 percent earlier.
When Indian equities markets opened Friday morning, both the Nikkei, key index of the Tokyo Stock
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2. Exchange and the Hang Seng, key index of the Hong Kong Stock Exchange, were down about 2
percent each.
The Nikkei fell further during the day and closed 5.01 percent down while the Hang Seng was 5.05
percent down when reports last came in.
quot;So you can't say that the Indian markets are really following global cues,quot; Thunuguntla said, adding
quot;the Indian market bounce-back was expected as there have been bear excesses and the Sensex
had even gone into 7,000 levels Monday.quot;
quot;Bear excesses are always followed by a sharp bounce-back and there is certainly short covering
but it is far too early to say that bulls are back in business,quot; he said.
He also said that with the October series of futures and options ending Wednesday and a new
series beginning Friday, there could also be some position building, which could be helping the
bounce-back.
( © IANS / India eNews)
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