The markets opened with the BSE 30 sensex at 2977 levels, saw a high of 3003 levels and low of 2943 levels, before closing at 2950 levels, thereby slipping 17 points. The advance decline ratio was at 5576 : 4768. The value of shares advancing was Rs. 9526 crores and the value of shares declining was Rs. 7487 crores. This indicates a marginal buying trend. The total traded volume on the BSE was Rs. 4952 Crores. The total traded volume on the NSE was Rs 12173 Crores. The week that was :- The week saw a placid start as the markets see-sawed with the global markets. The intra-week fluctuation was 2 % as the markets bounced off their lows. The crucial lows of November 2002 were not violated. The market was positive as the figures above indicate. The traded volumes slightly higher as the markets last week saw 4 trading sessions. Institutional activity was positive as the fund flow continued in Indian equities. The global markets also saw a bullish undertone in the last 2 sessions this week as investor confidence was seen on a "summer rally" in the western markets. The sensex was boosted by BHEL, Castrol, Cipla, Glaxo, Gujarat Ambuja Cements, HCL Tech, Hind Petrol, ICICI Bank, Infosys, L&T, MTNL, Nestle, Satyam Computers, SBI, Telco and Tisco. The Sensex was dragged down by Bajaj Auto, BSES, Dr. Reddy, Grasim, HDFC, Hindalco, ITC Ltd, Ranbaxy, Reliance Inds & Zee Telefilms. The rupee ended the week at 47.17 levels against the US $. Likely triggers :- The bullishness in the global markets is likely to percolate down to the Indian markets in the initial half of the coming week. Brisk activity will be seen in the short term. Software stocks may or may not participate in the rally as the US $ is weak in outlook and export earnings are likely to be subdued as billing rates are not being re-negotiated upwards. The strong Nasdaq however will ensure that tech stocks don't go lower either. The perception in the global markets is that a "summer rally" is likely to be seen in the western markets and valuations may improve over the short term. Also, as the Rupee strengthens against the US $, FII inflows are likely to continue solely on currency valuations alone. Though it does not really signal fundamental strength in our bourses, for the moment, FII's are likely to continue pumping in money into Indian markets. The put call ratio shows a rise in puts outstanding to 0.58 : 1. This shows a weaker undercurrent and therefore limited upsides immediately. Shipping, Auto ancillaries, Banking and commodity stocks are likely to see a concentrated buying momentum. Overall, we expect the week to see a pullback upwards. Technicals :- Please stay online to enable loading of graphics from our servers. The weekly bar chart of the Nifty shows a higher bottom & top formation as the index attempts to surpass the blue resistance trendline. In our view, the Nifty should see resistance in the near term at the 960 levels, give or take 5 points. Only above that levels, if the index manages to rally, will the markets see a further rally. On the lower side, expect a short term support at the 931 levels which will be the precursor to a final support before the 920 levels, below which the rally will reverse and see levels of 890 on the Nifty. The oscillators are pointing towards a weakness which will reverse only above the 1000 levels. The Nifty is likely to see a corrective rally in the first half of the week and see a small rally, which traders can use for quick gains.
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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