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July 16, 2005

Markets cover further ground. Sensex gains 59 points

Higher volumes, positive breadth as old economy stocks rally

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	7277	7352	7163	7271	59.46
BSE - 200	932	947	929	942	11.62
NSE - 50	2195	2234	2178	2212	16.35
Midcap 200	3153	3239	3153	3239	94.35
CNX-IT	3000	3041	2834	2893	105.90
NCDEX Agri	1251	1260	1249	1259	07.23
Dow Jones	10641 192	Nasdaq	2157 44	FTSE	5231 1
Advances	9540	Declines	6971	Put / Call trades - 124567 : 177975
FII Investments	Rs  3276 Crs July 1 - 14		Domestic Funds	Rs  750 Crs July 1 - 14

The BSE & NSE combined weekly value of shares advancing was Rs. 33,744 crores ( previous week Rs 29,081 crs ) and the commensurate value of shares declining was Rs. 20,202 crores ( previous week Rs 17,041 crs ). This indicates a buying bias. The total weekly traded volume on the BSE was Rs. 15,752 Crores ( previous week Rs 14,763 crs ). The total traded weekly volume on the NSE was Rs. 38,972 Crores ( previous week Rs 31,954 crs ).

The markets saw a volatile trading pattern as the bulls showed a lack of buying conviction at higher levels. The profit taking bias was evident as the upsides saw higher volumes and an increase in the PCR. The results announced by Infosys also played spoilsport as technology weighed down on the indices. Traded volumes improved and the market breadth was positive. The midcap segment out-performed the broader market after a brief hiatus. The capitalisation of the breadth was positive and the undertone remained positive. The Sensex was boosted by ACC, Bajaj Auto, Bharti Tele, BHEL, Cipla, Grasim, Guj Amb Cements, Hero Honda, Hindalco, ITC, ICICI Bank, L&T, MTNL, Maruti, NTPC, ONGC, Reliance Energy, Reliance Inds, Tata Motors and Tata Power. The Sensex was dragged down by Dr Reddy, HDFC Bank, HDFC, Hind Lever, Infosys, Ranbaxy, Satyam Computers, Tisco, TCS and Wipro. The Rupee ended the week at 43.51 levels ( 00.11 ) 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 $ 58.09 / barrel ( previous week US $ 59.63 / barrel ).

• The FII inflows are positive as the week saw inflows of Rs 1269.30 crs between Mon - Thurs. That is likely to be a source of comfort for bulls.

• The F&O indicators point towards a higher open interest and higher traded volumes. The Nifty PCR shows an increase in short positions, which will cushion the falls during corrections.

• Inflation figure of 4.09 % for week ended July 02 2005 is lower than the previous weeks figure of 4.14 %. This level is the lowest in 22 months. Fears of higher crude prices impacting the Indian economy are likely to ease on this news.

• The market breadth points towards a bullish undertone as the BSE & NSE combined advance decline ratio is positive for the second week in a row. Of the entire traded volumes of the week, 78 % was initiated on uptick days. That indicates a bullish bias.

• The results announced by TCS are likely to salvage the sagging sentiments in the technology sector and since the weightage of tech is high in the indices, we expect the uptrend to sustain for now.

• The overseas markets have been bullish on the back of positive economic data, good earnings numbers and lower crude prices.

• Please refer to our special editions - Flavours of the week, Midcap Stock edition, Commodities ticker reader, F&o statistics and the crude and currency newsletters for a broader perspective on the 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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