It was not a very good week for the markets, with Thursday seeing the markets plunge sharply, thanks to some heavy selling by Foreign Institutional Investors. In fact, they repeated their selling on Friday, and thus in the cash segment, have sold shares worth Rs 2,402 crores this week. Thanks to domestic institutions who bought shares worth Rs 3,543 crores, which helped support the market.
On Thursday it was carnage with the Nifty ending a huge 126 points lower due to weak gloal cues. There were a number of reasons why the markets fell. The first and the foremost was expectations that the US Fed would raise interest rates very soon in December. Chinese data too was not very encouraging. To compound misery was results from TCS and Infosys, which lagged estimates.
Going ahead, we do not see too much of a rebound in the markets. We believe that the p/e for Sensex companies at almost 19 times, is way above the historical averages. With earnings not catching-up it is best to stay away from the markets for the time being.