Sentiment remains weak

Investor sentiment has been hit by the latest bank loan bribery scandal. The Central Bureau of Investigation on Wednesday, 24 November 2010, unearthed a bank loans bribery scandal, arresting 5 senior officials of PSU banks and CEO of LIC Housing Finance.



The Central Bureau of Investigation (CBI) has reportedly sent notices to 21 medium-to-large sized Indian companies regarding the ongoing probe into a financial bribery scandal. The cases are limited to individuals and unlikely to create a large fallout, a news agency report said citing an unnamed senior CBI official. The CBI is not currently considering widening its probe into bribery over loans to corporates, the report added.

Year-end profit taking may continue to weigh on the domestic bourses in the near term. Funds based in US and Europe follow calendar year as their accounting year. The market has lost ground soon after hitting a record closing high early this month.

On the macro front, the government will unveil the gross domestic product (GDP) data for the quarter ended September 2010 on Tuesday, 30 November 2010. The economy grew at 8.8% Q1 June 2010, at the fastest pace in nearly three years.

The HSBC Markit Purchasing Managers Index, based on a survey of 500 Indian companies, indicating health of manufacturing activity and the business activity index of the services sector, both for the month of November 2010, are due for release in the first week of December 2010.

Cement, auto and steel companies will announce their sales figures for the month of November 2010, next week.

Geopolitical tension arising from hostility between the Koreans, persistent concerns about euro zone debt problems and Chinese monetary tightening measures may weigh on global stocks. North Korea said on Friday, 26 November 2010 that impending military exercises by the South Korea and the United States are pushing the region towards war, days after it launched its heaviest bombardment since the 1950-53 Korean War.