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May 07, 2005

Markets spring back. Sensex gains 234 points

Lower volumes, positive breadth as bulls return to the ring

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	6183	6404	6140	6388	234.04
BSE - 200	824	851	818	849	28.75
NSE - 50	1903	1984	1898	1799	75.00
Dow Jones	10345  153	Nasdaq	1967  46	FTSE	4919  117
Advances	8545	Declines	7025	Put / Call trades - 94406 : 137751
FII Investments	Rs  70 Crs May 1 - 5		Domestic Funds	Rs  367 Crs May 1 - 5

The BSE & NSE combined weekly value of shares advancing was Rs. 21,995 crores ( previous week Rs 25,382 crs ) and the commensurate value of shares declining was Rs. 9,330 crores ( previous week Rs 26,610 crs ). This indicates a buying bias. The total weekly traded volume on the BSE was Rs. 10,214 Crores ( previous week Rs 16,070 crs ). The total traded weekly volume on the NSE was Rs. 22,361 Crores ( previous week Rs 36,760 crs ).

The markets ended the week with salutary gains of nearly 4 % on a w-o-w basis. The buying was broader based, especially in the last 3 sessions of the week. The traded volumes however were suppressed and that remains a cause for minor concern. The market breadth was comfortably positive and the capitalisatoin of the breadth also signals bullishness. The Sensex was boosted by ACC, Bajaj Auto, Bharti Tele, BHEL, Cipla, Dr Reddy, Guj Amb Cements, HDFC Bank, Hero Honda, Hindalco, HPCL, ITC, ICICI Bank, Infosys, L&T, MTNL, Maruti, ONGC, Ranbaxy, Reliance Energy, Reliance Inds, Satyam Computers, SBI, Tisco, Tata Motors, Tata Power, Wipro and Zee Telefilms. The Sensex was dragged down by Grasim and Hind Lever. The Rupee ended the week at 43.43 levels ( 00.10 ) 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 at US $ 50.96 / barrel ( previous week US $ 49.72 / barrel ).

• The FII inflows are turning positive in the cash and the f&o segment as the week saw inflows of Rs 70 Crs from Mon - Thurs. That is likely to imbibe some confidence in the bull camp.

• The F&O indicators point towards a rising open interest by 6 % on a w-o-w basis but with a steep rise in the put call ratio. The Nifty PCR stood at 1.11 : 1

• Inflation figure of 5.91 % is sharply higher than the previous weeks figure of 5.64 %. The rise has come due to rise on essential commodity prices. Any upward revision of petro products prices will bolster inflationary pressures.

• The market breadth points towards a positive undertone as the BSE & NSE combined advance decline ratio clearly favours the bulls. Of the entire traded volumes of the week, 81 % was initiated on uptick days. That signifies a bullish undertone.

• For an in-depth perspective to investing / trading, please also refer to our crude & currency edition, the flavours of the week, f&o edition, swing indicator edition and the mid cap editions.

• The overseas markets have been positive and are likely to add to the feel good factor in the domestic markets also.

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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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