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April 23, 2005

Markets recover from crucial supports. Sensex gains 98 points

Lower volumes, positive breadth bulls get respite

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	6220	6374	6118	6346	98.23
BSE - 200	839	851	821	847	06.40
NSE - 50	1955	1972	1902	1967	11.05
Dow Jones	10158  70	Nasdaq	1932 24	FTSE	4849 42
Advances	8167	Declines	7302	Put / Call trades - 120080 : 185889
FII Investments	Rs  772 Crs April 1 - 20		Domestic Funds	Rs  756 Crs April 1 - 20

The BSE & NSE combined weekly value of shares advancing was Rs. 33,479 crores ( previous week Rs. 25,426 crs ) and the commensurate value of shares declining was Rs. 14,824 crores ( previous week Rs. 48,115 crs ). This indicates a marginal buying bias. The total weekly traded volume on the BSE was Rs. 14,648 Crores ( previous week Rs. 20,788 crs ). The total traded weekly volume on the NSE was Rs. 34,018 Crores ( previous week Rs. 52,795 crs ). It should be noted that previous weeks higher volumes are due to multiple block deals.

The markets have shown a slight recovery from lower levels which we have been advocating as supports. The sentiments were seen as recovering as market players were enthused by corporate results than followed Infosys' dampener of last week. The market breadth shows a late recovery in the markets as short covering coupled with minor buying emerged near 1900 / 6100 levels. The Sensex was boosted by ACC, Bajaj Auto, Bharti Tele, BHEL, Cipla, Grasim, Guj Ambuja Cements, HDFC Bank, Hindalco, HDFC, ITC, Infosys, L&T, MTNL, Maruti, ONGC, Reliance Inds, Satyam Computers, Telco, Tata Power and Wipro. The Sensex was dragged down by Dr Reddy, Hero Honda, ICICI Bank, Ranbaxy, Reliance Energy, SBI, Tisco and Zee Telefilms. The Rupee ended the week at 43.75 levels ( 00.08 ) 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 higher at US $ 55.39 / barrel ( previous week US $ 50.49 / barrel ). This quantum jump of 10 % is likely to be a source of concern for global equity markets.

• The FII inflows are continuing to remain negative as they have sold on all four days of the week, outflows being Rs 1386 Crs. That is likely to be taken as a sign of caution in the coming week.

• The F&O indicators point towards a rising short sale position as the indices rally. The bears are building up positions even as the markets rally on decent volumes.

• The market breadth points towards a respite from the recent weakness in the sentiments. Of the entire traded volumes of the week, 37 % was initiated on uptick days. That signifies a lack of strong buying conviction from the bulls.

• The overseas markets have been mixed with the US markets showing a bounceback from lower levels. Much will depend on the FOMC coming up in the near future.

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Technicals

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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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