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May 14, 2005

Markets recover on cheaper crude prices. Sensex gains 63 points

Higher volumes, positive breadth as stocks rally on hope

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	6391	6494	6380	6451	63.06
BSE - 200	848	862	848	856	06.46
NSE - 50	1978	2007	1975	1988	10.80
Dow Jones	10140  205	Nasdaq	1977  9	FTSE	4886  32
Advances	10025	Declines	5749	Put / Call trades - 91909 : 122381
FII Investments	Rs  80 Crs May 1 - 12		Domestic Funds	Rs  1140 Crs May 1 - 12

The BSE & NSE combined weekly value of shares advancing was Rs. 20,815 crores ( previous week Rs. 21,995 crs ) and the commensurate value of shares declining was Rs. 12,966 crores ( previous week Rs 9,330 crs ). This indicates a buying bias. The total weekly traded volume on the BSE was Rs. 11,685 Crores ( previous week Rs 10,214 crs ). The total traded weekly volume on the NSE was Rs. 22,462 Crores ( previous week Rs 22,361 crs ).

The markets saw a recovery process as the indices gained values with steady volumes. The process of recovery was seen for the second week in a row. The sentiments were clearly improved over the previous week as the market breadth indicates and there was a qualitative improvement in the trading figures. Lower crude prices were a major domo trigger for the positive sentiments. The fact that the INR gained vis-a-vis the USD also raised hopes of FII inflows. The Sensex was boosted by ACC, Bajaj Auto, BHEL, Cipla, Guj Amb Cements, Hero Honda, HDFC, ITC, ICICI Bank, Infosys, L&T, Maruti, ONGC, Ranbaxy, Reliance Energy, Satyam Computers, SBI, Tisco, Telco, Tata Power and Zee Telefilms. The Sensex was dragged down by Bharti Tele, Dr Reddy, Grasim, HDFC Bank, Hindalco, Hind Lever, HPCL, MTNL, Reliance Inds and Wipro. The Rupee ended the week at 43.43 levels ( 00.00 ) 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 $ 48.67 / barrel ( previous week US $ 50.96 / barrel ). Coupled with the US $ movements, crude prices will determine the extent of FII inflows into the country in the coming days. Our investors may view our special crude and currency edition by clicking here.

• The FII inflows are negative with Rs 397 Crs being pulled out between Monday - Thursday.

• The F&O indicators point towards a 10 % jump in open interest, at the same time, the shorts have seen a significant jump too. The Nifty PCR has scaled up to 1.30 : 1 and is still climbing.

• The Indian weightage in the MSCI EM weightage is stepped higher at 5.42 %. This will have a sentiment boosting effect, even though marginal.

• Inflation figure of 5.67 % is lower than the previous weeks figure of 5.91 %. This is a positive trigger for the markets.

• The market breadth points towards an optimism in the undertone as the advance decline ratio is completely tilted in the bulls' favour. Of the entire traded volumes of the week, 100 % was initiated on uptick days. That signifies a bullish undertone for now.

• The overseas markets been largely nervous as the US economic data has been rather mixed and sentiment are plagued by nervousness. That will cap the upsides in the domestic markets in the coming week.

• For a complete perspective of the market trends, please refer to our special editions in the f&o segment, crude & currency, midcap and swing reversals.

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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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