It was the most unfortunate day for the corporate India when Mr Ramalinga Raju confessed that Satyam was a fraud. It came as a shocker and nothing less than a ban and a disgorgement order against the auditors of the company should compensate the loss of credibility that India has suffered. A fraud of this nature is beyond imagination and the reaction from the markets is not very surprising. Almost all sectors took a hit and stocks with not so sound credentials were beaten to dust. Not surprisingly, Satyam was the biggest Nifty loser with a fall of 86%. DLF, Rcom, Unitech, Reliance Infra, Siemens, Reliance Power, L&T, HCL Tech, Ranbaxy, RPL, Nalco and Reliance were the biggest losers. Grasim, Maruti, TCS, M&M, HDFC, HUL and Infosys were the top gainers.
The next week is going to be crucial as the results season begin with the announcement of results from Infosys. The results this quarter are likely to throw some negative surprises and we should be prepared for some nasty blows on specific stocks. One should remain short in the markets as we are convinced about the long term bearish outlook.
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