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May 28, 2005

Markets recover further. Sensex gains 208 points

Higher volumes, negative breadth as stocks extend rally to April levels

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	6504	6772	6499	6707	208.22
BSE - 200	857	893	857	883	26.51
NSE - 50	1992	2099	1991	2076	84.00
Dow Jones	10542 70	Nasdaq	2076 29	FTSE	4986 14
Advances	8053	Declines	8410	Put / Call trades - 113152 : 199831
FII Investments	Rs  844 Crs May 1 - 26		Domestic Funds	Rs  3465 Crs May 1 - 26

The BSE & NSE combined weekly value of shares advancing was Rs. 35,636 crores ( previous week Rs 18,612 crs ) and the commensurate value of shares declining was Rs. 15,275 crores ( previous week Rs 13,005 crs ). This indicates a marginal selling bias. The total weekly traded volume on the BSE was Rs. 15,991 Crores ( previous week Rs 10,636 crs ). The total traded weekly volume on the NSE was Rs. 35,769 Crores ( previous week Rs 21,257 crs ).

The week saw a continued bullishness as the expiry of the May f&o series witnessed short covering by the bears at higher levels. The traded volumes were higher as the traders participated well in short term trading. The market breadth was marginally negative as the short term bulls preferred to lighten commitments at higher levels. The undertone was optimistic and higher rollover figures pointed towards a bullish outlook in the near term. The Sensex was boosted by ACC, Bajaj Auto, Bharti Tele, BHEL, Cipla, Dr Reddy, Grasim, Guj Amb Cements, HDFC Bank, Hero Honda, Hindalco, Hind Lever, HPCL, ITC, ICICI Bank, Infosys, L&T, MTNL, Maruti, ONGC, Ranbaxy, Reliance Energy, Reliance Inds, Satyam Comp, SBI, Tisco, Telco, Tata Power and Wipro. The Sensex was dragged down by HDFC and Zee Telefilms. The Rupee ended the week at 43.53 levels ( 00.14 ) against the US $. Overall, the week was better than 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 at US $ 51.85 / barrel ( previous week US $ 46.80 / barrel ). It maybe a cause for inflationary concerns.

• The FII inflows are negative by Rs 185 Crs on May 26 2005. The net figures for the week stood at Rs (-) 294.40 Crs.

• The F&O indicators point towards a healthy rollover process and a high Nifty PCR at 1.12 : 1. The bears are continuing to press sales at higher levels.

• Inflation figure of 5.55 % is lower than the previous weeks figure of 5.61 %. That maybe a cause for minor comfort for the bulls.

• The partial disinvestment in BHEL is likely to be taken well by the market players and raise hopes in other PSU sectors.

• The market breadth points towards a selling bias at higher levels. Of the entire traded volumes of the week, 30 % was initiated on uptick days. That signifies a selling bias in the near term.

• The overseas markets have been firm on improved economic data and reasonably good earnings numbers.

• For a complete perspective on the markets, please refer to our special editions on Crude and currency, commodities, Midcap and f&o editions and the swing reversal indicators.

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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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