Moneycontrol Bureau
Global markets are going through a rough patch with parallels being drawn with the global financial crisis of 2008. Given the government's stretched finances and the patchy economic recovery, expectations from the upcoming Budget are low. India has so far not been immune to the global downtrend, with the Sensex and Nifty hitting new 52-year lows almost every week in January. Since December last year, both benchmark indices have lost around 6.5 percent. Midcaps and smallcaps have borne the brunt of the selling pressure so far and experts are warning of more pain ahead.
The carnage notwithstanding, some market experts feel the steep decline in prices good be a good opportunity to add some quality names to one's portfolio. “I would like to stay with quality names within the midcap basket and believe that the growth story is actually unfolding for many of the companies given the kind of growth in the economy which is now have started to happen," says Deven Choksey of KRChoksey Investment Managers says.
Midcap stocks like Jet Airways, SREI Infra, Pipavav Defence, Indian Hotels, Berger Paints, SKS Microfinance, SpiceJet and Indraprastha Gas are up 9-38 percent in a falling market. Buoyed up by low crude price Jet Airways gained 38 percent and SpiceJet added 9 percent in the period under review. Oil prices have fallen more than 70 percent in the past 18 months. Over supply due to excessive oil pumped by global exporters per day is set to worsen with the return of Iranian barrels to the market following the lifting of nuclear-related Western sanctions. Crude oil is still below USD 30 a barrel.
Meanwhile, Indraprastha Gas surged on the anti-pollution drive in Delhi and NCR. In order to curb pollution the Oil Ministry has asked IGL to increase availability of CNG in Delhi. As per CNBC-TV18, IGL has received approval from the Oil Ministry to set up CNG pumps at oil marketing companies (OMC’s) fuel outlets and may also receive new sites to establish fuel outlets in the. IGL plans to start selling CNG from Indian Oil Company (IOC), Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) petrol pumps.
(infographics: Sanjit Oberoi)Yuan devaluation, commodity prices fall and negative outflow in emerging markets flows have been cause of market fall worldwide. Crude too has been slippingsharply. Currency war, crude volatility coupled with weak Asian markets and tepid December quarter earnings are likely to keep market under pressure. Vikas Khemani of Edelweiss Securities people are struck with panic and fear about future because of yuan devaluation and next 3-6 months will be volatile. The combined market valuation of seven of the top-10 most valued Sensex firms declined by Rs 48,762.5 crore last week, with IT bellwether TCS taking the steepest hit. While TCS, HDFC Bank, CIL, Sun Pharma, ONGC, HDFC and HUL suffered losses in their market capitalisation (m-cap), RIL, Infosys and ITC emerged as gainers.Follow @NasrinzStory
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