Fear seems to be overtaking faith
as rating agencies appear to be on a downgrade overdrive. The Moody’s blues
started with the ratings agency downgrading the standalone rating for State
Bank of India,
citing its ‘modest’ capital and weakening asset quality. This triggered a panic
sell-off in the stock in particular and the market in general.
The opening is set to be flat at
best. Some buying is likely in counters which were mercilessly hammered in
recent times. But that does not mean the situation has changed for good. Stick
to a very cautious approach for now.
Asian stocks are down following a
downgrade of Italy’s
credit rating. Markets in Hong Kong and mainland China were closed for holidays. Oil
has bounced back after reports of a drop in US stockpiles and hope of an
European recovery. Reports indicate that Europe
will recapitalize its banks to reduce worries of a debt crisis.
Fed chief Bernanke says the
central bank is ready to take more action if necessary to bolster the U.S.
economic recovery. Greece’s
finance minister says the nation can cover pensions, salaries and bondholders
just through the middle of next month.
