Mistry exit dents scrips, puts investors on caution mode

Mistry’s subsequent allegations on corporate misconduct at the conglomerate further subdued stocks of the group firms. Moreover, investors were cautious due to the rise in the levels of non-performing assets (NPAs) of the banking sector. However, short covering, combined with bargain hunting and healthy quarterly results, helped the key indices to pare some losses. 

“Indian equity markets traded with bearish sentiments this week due to profit booking and selling pressure at higher levels. However, some recovery was witnessed from the lower levels during the latter part of the week,” Dhruv Desai, Director and COO, Tradebulls, opines.

“Sentiments were undermined after a World Bank report showed that India had moved up by only one spot on the ease of doing business ranking this year, a disappointing result for the Narendra Modi government that took several initiatives.” 

For the week ended October 28, the 30-scrip sensitive index (Sensex) of the BSE declined by 135.67 points or 0.48 per cent to 27,941.51 points. Similarly, the 51-scrip Nifty of the National Stock Exchange (NSE) edged lower by 55.05 points or 0.63 per cent to 8,638 points. 

In terms of sector-based indices, metal and consumer durables stocks plunged by 2.9 per cent and 2.2 per cent respectively. The FMCG index was the only sector-based index to close in the positive territory -- up 0.2 per cent.

The end of trade week also marked the closure of the Hindu Samvat 2072 year. Till date in Samvat 2072, the barometer index gained 2,074.56 points or 8.02 per cent, whereas the NSE Nifty swelled by 813 points or 10.38 per cent.

Angel Broking feels the equity markets lost ground during the early part of the week on the back of weak global cues and poor investors’ sentiments due to the ongoing dispute at Tata Sons. 

“Indian markets reacted negatively to the public dispute that followed the removal of Cyrus Mistry as Chairman of Tata Sons. This issue further weakened the market after weak global earnings kept global equity indices suppressed,” the firm said. 

During the week, investors’ sentiments were also undermined by an SBI (State Bank of India) report which indicated that manufacturing growth is likely to remain flat. 

Other reports such as Moody’s assessment on the large-scale decline in private investment in PPP (public private partnership) projects in recent years due to delays in project approvals and land purchases eroded investors’ confidence. 

Meanwhile, NS Rajan, who held the position of Tata Group’s Chief of Human Resources (CHRO), was a member of the defunct Group Executive Council (GEC) set up by Cyrus Mistry, who was ousted as Chairman by Tata Sons’ Board. Days after his ouster, Tata Group’s HR honcho Rajan put in his papers. Rajan, who held the CHRO position of Tata Group’s, was a member of the GEC since May 2013, after being set up a month earlier headed by Mistry with the objective providing strategic and operational support to him.

Following the announcement of ouster, the GEC was also disbanded.