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Dec 12, 2004

Markets correct on FII concerns. Sensex sheds 89 points.

Lower volumes, positive breadth as rising oil & dollar spooks players.

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	6351	6386	6221	6233	89.22
BSE - 200	839	844	825	827	08.17
NSE - 50	1996	2012	1964	1969	27.20
Dow Jones	10543 49	Nasdaq	2128 20	FTSE	4694 54
Advances	1668	Declines	1464	Put / Call trades - 50191 : 115509
FII Investments	Rs  2704 Crs Dec 1 - 9		Domestic Funds	Rs  665 Crs Dec 1 - 9

The value of shares advancing was Rs. 2,224 crores ( previous week Rs. 57,202 crores ) and the value of shares declining was Rs. 8,380 crores  ( previous week Rs. 15,627 crores ). This indicates a marginal buying bias. The total traded volume on the BSE was Rs. 32,653 Crores  ( previous week Rs. 43,991 Crores ). The total traded volume on the NSE was Rs. 24,421 Crores  ( previous week Rs. 29,102 Crores ).

The week saw a consolidation as the markets succumbed to worries on multiple fronts. Rising US $ raised concerns about sustained FII inflows. The possibility of the rise in crude prices and continued acrimony on the Reliance issue dogged sentiments. The traded volumes took a beating and the market breadth remained marginally positive. The undertone was cautiously optimistic, with an absence of panic selling. The Sensex was boosted by ACC, Bharati Tele, BHEL, Dr Reddy, Grasim, Guj Ambuja Cements, Hero Honda, Hind Lever, ICICI Bank, Maruti, MTNL, Ranbaxy, SBI, Tata Power and Zee Telefilms. The Sensex was dragged down by Bajaj Auto, Cipla, HDFC Bank, HPCL, Hindalco, Infosys, ITC, L&T, ONGC, Reliance Energy, Reliance Inds, Satyam Computers, Telco, Tisco and Wipro. The Rupee ended the week at 44.54 levels ( 00.46 ) 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 at US $ 40.71 / barrel ( previous week $ 42.54 levels )

• The FII inflows are continuing to remain firm and the previous weeks figures total Rs 904 Crs which is a comfort for the bulls.

• The strengthening US $ is likely to be a boost for the technology counters which will be firm in the coming week. Being heavily weighted on the indices, the markets are likely to get a boost from this segment.

• The F&O indicators point towards a rising open interest on a week-on-week basis and a rising PCR on the Nifty. That shows a hedging bias as stock long positions are being hedged with Nifty shorts.

• The market breadth points towards a marginal tilt towards the bulls and of the entire weekly traded volumes, 47 % were transacted on negative breadth days. That shows a marginal bullish bias.

• The newsflow on the Reliance front is positive for now and is likely to enthuse the players. That should improve sentiments.

• We feel the Mauritius dual taxation treaty may not dampen sentiments significantly as majority of new funds are coming from alternate destinations like Cyprus. Besides, many such treaties with other countries are on the anvil.

• The overseas markets are showing signs of fatigue as the upsides are being met with profit taking. Investors are awaiting the pre-christmas shopping data to evaluate the consumer demand.

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Technicals

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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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