Friday, November 28, 2008

Terrorist attack on Mumbai had little impact on Sensex today

The benchmark index shrugged off the Mumbai terror attack and closed 66 points higher at 9,092 amid choppy trade. A better-than-expected GDP figure and short covering as the monthly futures expired helped the Indian markets to move higher. The broader Nifty closed at 2,755, up 3 points.

Most Asian stock markets rose on Friday as investors bought beaten-down shares on hopes that China’s big interest rate cut will stimulate growth and optimism over Wall Street's four-day rally.

In fact, the Sensex has proved its resilience to terror attacks over the years. Since 1993, in eight out of twelve occasions the Indian benchmark index gave a positive return a day after the terror attack occurred. In 1993, a day after the Mumbai bombings, it gave a return over 2 per cent. However, in the five-day period after the terror attacks, the market has dipped by an average about 3 per cent in eleven occasions.

Despite the gains on the BSE, airline and hotel stocks were hammered as the terror attack dampened sentiment in the stock. SpiceJet, Kingfisher and Jet plunged between 5 and 6 per cent. Indian Hotel, which owns the Taj Hotel property in India, fell 17 per cent.

Among the different sectors on the BSE, IT and auto lead the gains. The BSE IT index gained 3.6 per cent while the auto index advanced 2.4 per cent. Among the IT stocks, Patni advanced 14 per cent, TCS gained 5.9 per cent, while Infosys added 4.9 per cent.

Amtek Auto, up 14.7 per cent, led the gainers among the auto stocks. The other auto stocks Cummins India, M&M, and Hero Honda also gained between 5.2 per cent to 3.3 per cent.

Besides, IT and auto, FMCG, and banking stocks also saw strong buying with their indices on the BSE ending in the green. Metal, realty and oil & gas stocks led the decliners. Among the metal stocks Nalco plunged nearly 8 per cent. In the realty pack, Unitech plunged 10.8 per cent.

Among the Sensex stocks, TCS, BHEL, and Infosys led the gainers while Rel Infra, L&T, and Grasim saw heavy selling pressure.

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