Stock Market: Sweating out for base formation; Das Capital dispels fear

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By S Jha

New Delhi, March 18: Europe remained under the bar. The US too was down. Yet, the Indian indices spurted after spending a huge amount of time to resolve positions at the lever level. The decisive spurt in the indices came in the last hour, led by Bank Nifty to outpace in quick time.

Once more the Indian stock markets were rescued by Bank Nifty. This has been seen on several occasions in the last 18 months. Bank Nifty stays the savior of the broader equity market. The spurt came almost three hours before Reserve Bank of India (RBI) Governor Shaktikant Das delivered a lecture in Kochi, Kerala.

The key imports of Das lecture were – worst of inflation is behind; Indian remains fastest growing economy; and the Indian bank, while they are in the best of health, should watch out against piling up bad assets. If this speech had been delivered in the market hours, the traders could have run on the Dalal Street with jubilation.

Inflation has been the principal foe of equity market in the recent month. The headline interest rates are at the peaks. The industries are reeling under high rates. Europe industrial growth is clocking either zero growth or negative. The European markets are mirroring the state of their economy.

But India has a few positives to count. This appears to have rubbed in positively on the Dalal Street, as the indices closed in green for the second consecutive days after a series of deep dives. Have the indices formed short term bases remain a question that is being thought of by the market participants.

The institutional action was net positive, because the domestic institutional investors (DIIs) almost squared off the selloff by the foreign institutional investors (FIIs). The DIIs brought in a net of Rs 1817 crores in the cash market.

The HDFC twins gave the equity markets the much needed stability by raising over one per cent each. IT pack came rocking in the market to infuse confidence among the market participants. HCL Technology first broke the ranks to spurt by over three per cent. The IT bellwether Infosys too came strongly in the market, gaining strongly.

Kotak Mahindra Bank, SBI, ICICI Bank, Axis Bank and HDFC Bank fired to send the Bank Nifty soaring. The large banking scrips have major weightages on the indices.