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March 05, 2005

Markets zoom to new highs. Sensex gains 280 points

Higher volumes, positive breadth as bulls grab initiative

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	6584	6864	6545	6849	279.76
BSE - 200	885	920	880	918	35.09
NSE - 50	2061	2152	2047	2148	87.25
Dow Jones	10941  99	Nasdaq	2071  5	FTSE	5036  29
Advances	9066	Declines	6944	Put / Call trades - 72218 : 147524
FII Investments	Rs   Crs Mar 1 - 3		Domestic Funds	Rs   Crs Mar 1 - 3

The BSE & NSE combined weekly value of shares advancing was Rs. 30,558 crores ( previous week Rs 17,709 crs ) and the commensurate value of shares declining was Rs. 12,029 crores ( previous week Rs 15,314 crs ). This indicates a marginal selling bias. The total weekly traded volume on the BSE was Rs. 13,922 Crores ( previous week Rs 10,830 crs ). The total traded weekly volume on the NSE was Rs. 28,901 Crores ( previous week Rs 22,314 crs ).

The markets saw a record breaking week as the indices zoomed into stratospheric highs amidst higher volumes. The market breadth was highly positive and the undertone was highly optimistic. The capitalisation of the breadth shows a buying bias on the index heavy-weights and stronger hands were seen lending buying support at higher levels. The Sensex was boosted by ACC, Bajaj Auto, Bharati Tele, BHEL, Cipla, Dr Reddy, Grasim, Guj Ambuja Cements, HDFC, HDFC Bank, Hero Honda, Hindalco, Hind Lever, ICICI Bank, Infosys, ITC, L&T, Maruti, ONGC, Ranbaxy, Reliance Energy, Reliance Inds, Satyam Computers, SBI, Telco, Tisco, Wipro and Zee Telefilms. The Sensex was dragged down by HPCL. The Rupee ended the week at 43.73 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 this week at US $ 53.78 / barrel ( previous week US $ 51.49 / barrel ).

• The FII inflows are continuing to be positive and the undertone has changed for the better. That is a significant improvement over the previous week, where uncertainty ruled the roost.

• The F&O indicators point towards a rise in open interest on a week-on-week basis albeit with a high Nifty PCR.

• The impeding advance tax & service tax liabilities may see a sucking off of liquidity among the domestic investors / traders starting next week. The FII inflows however will remain independent of these factors.

• The market breadth points towards a bullish bias in the markets as the above table indicates. Of the entire traded volumes last week, 17 % was initiated on bearish sentiment days, the remaining was on uptick days. That is a sign of optimism.

• The overseas markets are also in a bull grip as the US market indices are at new 3 1/ 2 year highs. That is likely to see a trickle down effect in the domestic markets also.

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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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