The Professional Ticker Reader ®

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April 16, 2005

Markets in negative spiral. Sensex crashes 231 points

Higher volumes, negative breadth as Infosys guidance emboldens bears

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	6477	6515	6232	6248	231.20
BSE - 200	869	873	839	841	28.40
NSE - 50	2032	2038	1952	1956	74.90
Dow Jones	10088 373	Nasdaq	1908 91	FTSE	4892 92
Advances	4887	Declines	7560	Put / Call trades - 78965 : 133834
FII Investments	Rs  614 Crs April 1 - 13		Domestic Funds	Rs  395 Crs April 1 - 13

The BSE & NSE combined weekly value of shares advancing was Rs. 25,426 crores ( previous week Rs 15,019 crs ) and the commensurate value of shares declining was Rs. 48,115 crores ( previous week Rs 15,206 crs ). This indicates a selling bias. The total weekly traded volume on the BSE was Rs. 20,788 Crores ( previous week Rs 9,201 crs ). The total traded weekly volume on the NSE was Rs. 52,795 Crores ( previous week Rs 21,222 crs ). It maybe noted the volume figures are higher due to unusual activity in the block deals last week.

The week saw a triumph of bears over the bulls as the markets nosedived to log the second highest intraday falls of the calendar year 2005. The traded volumes were higher and the market breadth was very negative. The capitalisation of the breadth also showed a weak undertone and the institutional players refused to lend support at lower levels. The Sensex was boosted by Bajaj Auto, BHEL, Guj Amb Cements and Hind Lever. The Sensex was dragged down by ACC, Bharti Tele, Cipla, Dr Reddy, Grasim, HDFC Bank, Hero Honda, Hindalco, HPCL, HDFC, ITC, ICICI Bank, Infosys, L&T, MTNL, Maruti, ONGC, Ranbaxy, Reliance Energy, Reliance Inds, Satyam Computers, SBI, Tisco, Telco, Tata Power, Wipro and Zee Telefilms. The Rupee ended the week at 43.83 levels ( 00.06 ) against the US $.  Overall, the week was completely in line with our expectations. Click here to view the previous weeks report.

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• The markets are likely to take note of crude prices which are lower at US $ 50.49 / barrel ( previous week US $ 53.35 / barrel ). That will ease the inflationary concerns in the market place.

• The FII inflows are continuing to remain at a trickle with Rs 138 Crs being invested between Mon - Wed.

• The inflation figure for the week ended April 02 2005 stood at 5.26 % as compared to 5.05 % in the previous week.

• The F&O indicators point towards a rise in short positions and a lack of buying conviction on the part of the bulls.

• There is a likelihood of margin pressure as the markets have witnessed a sharp fall and the leveraged positions are likely to get pared in the coming week.

• The expansion of the f&o list is likely to rope in retail players over the medium / long term.

• The SEBI move to probe into the recent market meltdown may cause a temporary arresting of the downslide.

• The market breadth points towards a weak undertone as the sellers out number the buyers by a huge margin. Of the entire traded volumes transacted last week, 26 % were initiated on positive market breadth days. That indicates a selling bias.

• For a broader perspective on the triggers in the coming week, please refer to our special editions on currency & crude and the commodities edition.

• The overseas markets have also collapsed on weaker economic data, earnings concerns and profit guidance. That is likely to add to the negative sentiments in the domestic markets.

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Technicals

This segment is for paid subscribers only.

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For stock specific recommendations please refer to our special edition " Flavours of the week". Click here to view the previous editions of the "Flavours of the week".

Have a profitable day.

 

Vijay L Bhambwani

Ceo :- Bsplindia.com

The author is a Mumbai  based investment consultant and invites feedback at Vijay@BSPLindia.com and  ( 022 ) 23438482 / 23400345.

SEBI disclosure -  The author has no positions in  the stocks mentioned above.

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