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Feb 19, 2005

Markets suffer the pre budget blues. Sensex sheds 49 points

Lower volumes, negative breadth as bulls go on back foot

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	6673	6719	6532	6584	49.44
BSE - 200	895	901	877	882	09.66
NSE - 50	2083	2110	2045	2055	26.50
Dow Jones	10785 11	Nasdaq	2059 18	FTSE	5057 13
Advances	7364	Declines	9664	Put / Call trades - 55866 : 125831
FII Investments	Rs  5958 Crs Feb 1 - 17		Domestic Funds	Rs  121 Crs Feb 1 - 17

The BSE & NSE combined weekly value of shares advancing was Rs. 23,914 crores ( previous week Rs 30,576 crs ) and the commensurate value of shares declining was Rs. 20,425 crores ( previous week Rs 15,363 crs ). This indicates a marginal selling bias. The total traded weekly volume on the BSE was Rs. 21,196 Crores ( previous week Rs 22,209 crs ). The total traded weekly volume on the NSE was Rs. 23,311 Crores ( previous week Rs 25,023 crs ).

The markets showed an underlying nervousness in the sentiments as the bulls were unable to sustain the buying momentum. There was a clear sense of lack of buying momentum at higher levels. The traded volumes were compressed and the market breadth was negative. Coming on the eve of the budget, this has negative indications for the short term trends for the markets. The week saw a rangebound trade and a breakout / breakdown is awaited. The Sensex was boosted by Bharti tele, BHEL, Hindalco, ICICI Bank, Infosys, L&T, SBI, Tata Power and Tisco. The Sensex was dragged down by ACC, Bajaj Auto, Cipla, Dr Reddy, Grasim, Guj Ambuja Cements, HDFC, HDFC Bank, Hero Honda, Hind Lever, HPCL, ITC, Maruti, MTNL, ONGC, Ranbaxy, Reliance Energy, Reliance Inds, Satyam Comp, Telco, Wipro and Zee Telefilms. The Rupee ended the week at 43.79 levels ( 00.01 ) 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 up sharply at US $ 49.01 / barrel ( previous week US $ 47.16 / barrel ). This is likely to aggravate the inflationary fears in the markets.

• The FII inflows are highly positive as the week saw inflows of Rs 2145 crs between Mon - Thu. That is likely to be a booster shot for the bulls.

• The F&O indicators point towards a 3 % rise in the open interest and a marginal fall in the Nifty PCR. That shows a profit taking bias by the bears at lower levels. 

• The market breadth points towards a weakness in the undertone and the advance decline ratio above shows a selling bias. 14 % of the entire weekly traded volumes were initiated on uptick days.

• The impeding expiry will see unwinding / rolling over considerations causing routine volatility.

• The overseas markets are subdued and are unlikely to provide any bullish impetus to the domestic markets.

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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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