“It is too premature to say there is a definite bullish trend in the market,” said Jagannadham Thunuguntla, head of the capital markets arm of India’s fourth largest share brokerage firm, the Delhi-based SMC Group. “Just too much has happened in the last two months and investors are still shell-shocked and trying to understand the state of the global economy,” Thunuguntla said.

1. Saturday, November 1, 2008
Markets end week green, liquidity steps brighten outlook
Mumbai: With Indian equities markets worshipping Lakshmi, the goddess of wealth, during
Diwali this week, some wealth seems to have come back to the battered markets with a key share
index ending the week with a gain of 12.5 percent after losing nearly 35 percent in the first three
weeks of October.
The measures taken Saturday by India's central bank, the Reserve Bank of India (RBI), will also
help to boost liquidity and may brighten investor sentiments when markets reopen next week,
analysts said.
Analysts, however, cautioned that while liquidity is much needed, the pace and intensity of the
measures being introduced by the RBI may lead to a similar situation as in the US where too
much liberalization of the financial markets brought on the present global turbulence.
The benchmark 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) ended
the week Friday at 9,788.06, up 1,086.99 points or 12.5 percent from its close Friday previous
week at 8,701.07.
Similarly, the broader-based 50-share S&P CNX Nifty of the National Stock Exchange (NSE)
finished the week Friday at 2,885.60 points, up 301.6 points or 11.7 percent from its close Friday
previous week at 2,584.00.
The BSE midcap ended Friday this week at 3,200.02 points, up 104.34 points or 3.4 percent from
its close Friday previous week at 3,095.68 points.
The BSE smallcap ended Friday this week at 3,765.11 points, up 103.28 points or 2.8 percent
from its close Friday previous week at 3,661.83 points.
The week, however, began disastrously with the Sensex hitting a three-year low in intra-day
trading Monday falling even below the 8,000 mark to 7,985.07 points before recovering
somewhat to end the day at 8,509 points, down 191.51 points or 2.2 percent from its close
previous Friday at 8,701.07 points.
At the NSE, the broader-based 50-share S&P CNX Nifty closed Monday at 2,524.2 points, down
59.8 points or 2.31 percent from its close Friday previous week at 2,584.00 points.
Tuesday was Diwali and with brokers worshipping Lakshmi at the BSE, cheer returned to the
markets and the Sensex made a sharp U-turn to regain the psychologically important 9,000 mark
after falling freely for the past few trading sessions.

2. In special ‘muhurat’ trading Tuesday, marking the beginning of the Hindu Samvat calendar year
2065, the 30-share Sensitive Index (Sensex) of the Bombay Stock exchange closed at 9,008.08
points, up 498.52 points or 5.86 percent.
The Nifty too ended 160.4 points or 6.3 percent higher at 2,684.6 points from its previous close
Monday at 2,524.2 points.
Wednesday too saw the Sensex finish a tad higher at 9,044.51 points to post a marginal gain of
36.43 points, or 0.40 percent, over Tuesday’s close.
At the National Stock Exchange (NSE), the broader S&P CNX Nifty ended Wednesday at
2,712.50 points, up 27.90 points or 1.04 per cent from its previous close Tuesday at 2,684.6
points.
There was no trading Thursday as markets were closed on account of Hindu festival Bhai Duj.
After the bear market excesses of the last few weeks, Friday saw Indian equities markets really
bounce back with the Sensex closing with a gain of 743.55 points or 8.22 percent - the biggest
single-day gain in recent weeks.
Markets opened strong Friday with the Sensex up more than 300 points over its previous close
and rallied upward throughout the day to finish at 9,788.06, up 743.55 points or 8.22 percent
from its previous close Wednesday at 9,044.51 points.
Analysts said that although the RBI measures may seem justified in view of the extremely tight
money market conditions with overnight call money rates shooting up to 21 percent Friday night,
these moves should be reversed and a more prudent approach followed as soon as possible.
I just hope the good work done by the previous RBI Governor Y.V. Reddy to keep financial
markets in India on even keel is not reversed in these 15 days of CRR and repo rate cuts by as
much as 250 basis points and 150 basis points respectively, said Jagannadham Thunuguntla,
head of the capital markets arm of India's fourth largest share brokerage firm, the Delhi-based
SMC Group.
While extra liquidity will help big industry directly and small and medium industries indirectly,
too much liberalization of financial markets can pose the same kind of dangers that we are seeing
in the US, said Chandra Shekhar Goel, vice president of industry lobby Federation of Indian
Small and Medium Enterprises (Fisme).