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Growth hype not enough to inspire Sensex

Equities markets were solely focused on the fourth-quarter earnings season and the outlook that companies had to offer for future growth.

Mumbai - Indian equities markets were dampened during weekly trade ended April 17, proving that mere endorsement of economic growth potential by international financial institutions is not enough and that corporate India’s earnings have to catch up with the high expectations.

Even though India’s economic growth potential was endorsed by the likes of the World Bank, International Monetary Fund, Asian Development Bank, Organisation for Economic Cooperation and Development, Moody’s and Economist Intelligence Unit, this was not enough to cheer the markets.

Equities markets were solely focused on the fourth-quarter earnings season and the outlook that companies had to offer for future growth.

The benchmark 30-scrip Sensitive Index of the S&P Bombay Stock Exchange lost 457.28 points or 1.58 per cent during the weekly trade session ended April 17.

The Sensex had ended the weekly trade session at 28,422.10 points. For the previous weekly trade ended April 10, the BSE Sensex closed at 28,879.38 points.

The S&P BSE Sensex had gained 619 points or 2.19 per cent during the weekly trade ended April 10 to end at 28,879.38 points, against the April 1 close of 28,879.38 points.

“The markets were dampened mainly due to poor quarterly results of some of the major companies. There was also no positive triggers for the market during the last week,” Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.

According to Nevgi, investors were cautious about the Greek economic crisis and its fallout on the eurozone economies, as well as other international events like the instability in Yemen.

“Investors were concerned about an external shock that could have emerged from the Greek debt crisis, the Yemen unrest and appreciating oil prices,” Nevgi added.

Anindya Banerjee, senior manager at Kotak Securities, told IANS that the Indian markets still remained expensive to invest in and that further reforms and ground-level execution of the government’s plans will add more confidence.

“The markets are expected to remain choppy during this results season. Plus there are no signs of the economy improving due to structural issues that have dented sentiments. New economic reforms and execution of earlier reforms will add in more investor confidence,” Banerjee added.

Vinod Nair, head of fundamental research at Geojit BNP Paribas Financial Services, said that the markets would now like to understand the earnings outlook.

“Based on that [outlook], 2015-16 earnings growth will be decided which continues to be pegged at 18-20 per cent growth,” Nair said. 

(WEEKLY BOMBAY STOCK EXCHANGE)