Taking stock for 1 Nov 2009

Taking stock for 1 Nov 2009

The sensitive index fell on Monday, October 26th after a choppy day of trade, led by banks, on concerns that the RBI may raise interest rates. A monetary policy meeting was held on Tuesday to review the rise in inflation and the weak economic recovery. ITC rose after the Credit Suisse Group AG increased its rating to ‘outperform’ from ‘neutral’ because of strong second quarter figures.

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India’s benchmark index fell again on Tuesday, the most in 2 months, again led by lenders after the RBI increased the nation’s inflation forecast from 5% to 6.5%, and raised the statutory liquidity ratio for banks. Real estate stocks took a hit after an RBI decision to hike bank loan rates to the sector from 0.4% to 1%, making loans more expensive. Bharti Airtel led the decline in telecom stocks, on concerns that increasing competition would push rates lower, which could hurt profitability.

The Sensex fell for a 3rd day in a row, after the RBI said it may have to pull out from the stimulus package in a calculated way to help control inflation. Maruti Suzuki, one of the many companies that benefited from the stimulus package, fell on the news. Lenders continued their slide, again on news that the RBI would increase the limit that banks would need to set aside for government bonds and on concerns of higher inflation. The country’s most valuable company Reliance Industries rose on news that there would be increased output from the sale of gas to a customer from one of its gas fields.

The gauge continued its decline on Thursday, led by banks, on news that the Wholesale Price Index rose the most since May. Sterlite Industries fell after it reported a 25% downturn in Q2 profits. Some IT service providers also fell on news that US home sales slumped 3.6% in September, possibly impacting spending.

Although Friday’s trading session started off strong with reports that the US was out of a recession, the Sensex ended the day slipping below the 16,000 mark, falling 5.5% for the week.

Top gainers were Sterlite Industries, ICICI Bank, Grasim, Tata Motors, and Maruti Suzuki.

Top losers included Reliance Communications, Bharti Airtel, Reliance Infrastructure, Tata Power, and Reliance Industries.

While the Auto, Metal, and Consumer Durables indices ended the day in the green, other sector indices ended the day in the red.