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MArket Analysis

Bank stocks take a beating (The Hindu Business Line 30th Jan 2008)Bank stocks took a beating on the bourses on Tuesday as the Reserve Bank of India’s Credit Policy belied the market expectation of a rate cut.
The BSE-Bankex plunged 3.48 per cent after riding high on Monday on speculation of a possible interest rate cut. The BSE-Bankex had gone up by 1.24 per cent on Monday.
NSE’s Bank Nifty too plunged 3.36 per cent on Tuesday.
“Today’s was a temporary reaction to the Credit Policy in which the RBI has kept its key rates unchanged. A section of the market was expecting a rate cut by the RBI following the US Fed rate cut earlier,” said Mr Rajnish Rangari, Country Head, Investment Banking-CMG, Karvy Investor Services.
The top losers of the day were HDFC Bank, which fell 3.36 per cent; SBI, which dipped 3.58 per cent; and ICICI Bank, which went down 4.19 per cent. However, the status quo on interest rates will not impact the performance of the banks in the long run, felt analysts. More
Realty, bank, auto stocks clock sharp drop (Live mint.com 30th Jan 2008)Rate-sensitive stocks such as real estate, banks and automobile makers dropped sharply on the bourses after the Reserve Bank of India (RBI) left its key policy rates unchanged on Tuesday even as the equity market was expecting a rate cut after the recent 75 basis points rate cut by the US Federal Reserve.
RBI left its policy rates as well as the cash reserve requirement (CRR) that commercial banks need to keep with the apex bank unchanged. “(The) market was disappointed,” said Nilesh Shah, chief investment officer of ICICI Prudential Asset Management Co. Ltd, which manages Rs16,000 crore worth of equity assets. “Everyone was expecting a rate cut,” he said. More
Broking stocks among hardest hit in recent stock market fall (Live mint.com 30th Jan 2008)Broking stocks are among the most affected in the recent meltdown on the stock markets, with many shedding a large part of the gains they made in the last two months of 2007 and the first week of January.
For instance, India Infoline Ltd, which had generated 27% returns in one month ending 8 January, when the benchmark equity index Sensex recorded its highest closing of 20,873, has shed 29% since then. Shares of the company closed Rs1,287 on Tuesday. Edelweiss Capital Ltd, which listed at a huge premium of 75% to its issue price of Rs825 in December, has shed 38% in the same period. Two new entrants, Motilal Oswal Financial Services Ltd and Religare Enterprises Ltd have also lost 33% and 21%, respectively, since then. More

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IIP records negative growth of 0.4% in Oct

T he country's industrial output shrunk for the first time in many years to a record a negative growth of 0.4 per cent in October, stifled by manufacturing sector -- for rescuing which the government announced a stimulus package earlier this mo nth. Output had grown by 5.45 per cent in September, and 12.2 per cent in October, 2007. The Index for Industrial Production numbers for the seven-month period ended October was 4.1 per cent against 9.9 per cent a year ago. Manufacturing sector, which accounts for 80 per cent of the index, declined to 1.2 per cent from 13.8 per cent in the year-ago period. Only earlier this month, the government sought to rescue manufacturers by announcing an across-the-board (barring petroleum goods) four per cent cut in excise duty. Electricity sector grew by 4.4 per cent during the month, bettering 4.2 per cent output of the year-ago period, while mining sector grew by a slower 2.8 per cent against 5.1 per cent in the previous year's comparable period