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Market monitor - EY - India

Finesse: March-June 2011

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  • Indian stock markets ended the four month period from March 2011 to June 2011 with losses as the BSE Sensex shed 8% during the period. In contrast, EYIFSI reported 3% returns, while BSE Bankex ended almost at the same level.
  • The markets witnessed a fair degree of intermittent volatility as the BSE Sensex fluctuated in a range of 2,195 points during this period.
  • EYIFSI traced a similar pattern, although its movement was more pronounced than that in broader markets. The index surged in the first five weeks of the period to register 15% returns by 7 April 2011. Thereafter, it declined swiftly to pare down all the gains achieved initially. However, there was yet another short-term trend reversal in the last week of June 2011 that helped the index end in green.
  • The initial gains can be attributed to positive global cues, with easing of the crisis in Japan and the Middle East. However, the gains were short-lived as concerns relating to rising inflation came to haunt Indian markets. In addition, another rate rise made by the RBI has further added to the prevailing pessimism. However, macro-economic concerns may continue to drive the stock market performance of the financial services industry in the near term.
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