Markets to remain volatile next week: Analysts

7 out of 10 cos lost Rs 23K cr in a month

Brokers said the market is expected to remain choppy as it awaits cues from the US, where the Federal Reserve will meet on November 3-4 to decide upon rate cut. They added that at home, lack of any major event to mark the course of the market is also likely to take a toll as investors, who already feel that the market is currently over heated, would prefer to stay away.

“Market has gone up so much in the past few months... It is taking a breather now and waiting for some good news in the economy’s fundamental. So the market could not sustain the good news of US economy on Friday,” Unicon Financial Chief Executive Gajendra Nagpal said.

The US economy climbed out of recession growing by 3.5 per cent in the third quarter ending September 30 — the first quarterly expansion in a year. Further, he added: “The overall market sentiment is negative. The week will begin on a bad note on the back of the uncertainty in the global markets. As the week progresses some stability might come in the market as there would be sideways movement”.

Over the week, the BSE Sensex shed 7.2 per cent to close at 15,896 points.  “The benchmark index gave a monthly negative close, which further signals that the downtrend which started in October has still more to go on the lower side. So, we continue to maintain our short and medium term bias down,” brokerage firm Sharekhan said in its research note.

The downtrend in Indian stocks followed the market’s 17-month high in mid October, when the Sensex crossed the 17,400 points level. Analysts said the market was in the overbought territory, witnessing a hefty rally over September and the crossing the psychological 17,000 mark, but the surge could not be sustained and the market has declined to below 16,000 level.

Market captilisation

Seven of the top-10 most valued companies lost a total of over Rs 23,000 crore from their market capitalisation during the result season last month, while firms including Reliance Industries and NTPC saw their valuations rise. During the week ended October 31, of the top-10 companies five lost Rs 18,798.93 crore, while the rest added combined Rs 56,441.29 crore, resulting into a net gain of Rs 37,642.36 crore.

Mukesh Ambani-led Reliance Industries’ (RIL) market valuation rose by Rs 4,839.65 crore, taking its total market cap to Rs 3,46,440.26 crore for the month ended October 31. RIL had a market valuation of Rs 3,41,600.61 crore at the beginning of the month, on October 1, 2009.

Second comes oil firm ONGC, which witnessed a value erosion of Rs 2,277.9 crore during the month. Its market cap stood at Rs 2,50,525.84 crore. State-run NTPC inched up to the third slot by adding Rs 2,762.23 crore pushing trading firm MMTC that lost Rs 9,636.25 crore to the fourth position. The total market valuation of NTPC surged to Rs 1,76,205.48 crore, while MMTC’s dipped to Rs 1,70,186.25 crore.

Telecom services provider Bharti Airtel lost Rs 6,378.69 crore from its market valuation. Bharti Airtel’s total market cap stood at Rs 1,58,916.74 crore, while NMDC’s market valuation surged to Rs 1,42,055.2 crore. SBI’s total market cap dipped by Rs 901.53 crore to Rs 1,39,400.6 crore last month.

Power equipment maker BHEL witnessed an erosion of Rs 1,214.01 crore from its market cap taking its total market valuation to Rs 1,13,820.74 crore.