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Aug 28, 2004

Markets rally on oil relief. Sensex gains 52 points.

Volumes steady, positive breadth as bulls back in reckoning.

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	5064	5148	5022	5117	52.35
BSE - 200	660	674	653	673	11.53
NSE - 50	1590	1617	1573	1609	18.65
Dow  Jones	10195 85	Nasdaq	1862  24	FTSE	4490 121
Advances	7436	Declines	5823	Put / Call trades - 47872 : 96277
FII Investments	Rs  2839 Crs Aug 1 - 26		Domestic Funds	Rs  208 Crs Aug 1 - 26

The BSE & NSE combined weekly value of  shares advancing was Rs. 13,803 crores ( previous week Rs. 13,876 crs ) and the value of shares declining was Rs. 10,555 crores ( previous week Rs. 11,626 crs ). This indicates a broader buying bias. The total weekly traded volume on the BSE was Rs. 7,714 Crores ( previous week Rs. 7,598 crs ). The total weekly traded volume on the NSE  was Rs. 17,282 Crores ( previous week Rs 17,988 crs ).

The week saw a consolidation phase as the indices notched up gains on a week-on-week basis. The traded volumes were comparable to the previous week and the undertone was optimistic. The listing of TCS was the major event of the week and the biggest positive was the drop in crude oil prices. Both these factors caused a feel good factor in the markets. The market breadth remained positive in numerical and capitalisation terms. The only worry for the markets were the inflation figures and the truckers strike which showed no signs of ending. The Sensex  was boosted by Bajaj Auto, BHEL, Cipla, Dr Reddy, Grasim, Guj Amb Cem, HDFC Bank, HDFC, Hind Lever, HPCL, Hindalco, ICICI Bank, Infosys, ITC, L&T, MTNL, ONGC, Ranbaxy, Reliance Energy, Satyam Computers, SBI, Tata Power, Wipro and Zee Telefilms . The Sensex  was dragged down by ACC, Bharati Tele, Hero Honda, Reliance Inds, Telco and Tisco . The Rupee ended the week at 46.34 levels ( 00.02 ) against  the US $. Overall, the week was in line with our expectations. Click here to view the previous weeks files.

Top I Derivatives guide I Likely triggers I Technicals I Reco's I

• The markets are likely to be enthused by the lower oil prices and the marginal fall inflation to the 7.94 % levels.

• The FII inflows have turned positive as the Aug 26 figures show a positive Rs 126 crs investment. Though, the weeks figure are still a negative on a net basis, continued inflows are likely to encourage bulls.

• Of the entire turnover clocked in the past week, 42 % of the traded volumes were transacted on down tick days and the remaining on uptick days. That is a sign of comfort for the bulls, and a positive trigger. 

• The F&O indicators are showing a healthy rollover in positions as the bulls have preferred to carry forward their long positions to the September series. The PCR also shows an optimistic undertone.

• The ongoing truckers strike is likely to spook the markets in the short term as automobile majors like TVS, Telco, Hero Honda and M&M among others have indicated production losses in the event of a prolonged stir. The resultant effect will be seen on automobile stocks in the near term.

• Auto ancillary stocks in particular will see hectic action as the free trade agreement ( FTA ) with Thailand comes into effect from September. We expect cheaper spares to be imported into the country over the long term and affect sentiment for ancillary units.

• The overseas markets have gained over the previous week as the oil prices softened and the consumer spending data was comforting to the bulls. The traded volumes in the US markets however, have been thin.

Overall, we expect the week ahead to be optimistic and the markets are likely to attempt rallies as we advocated the week before. Click here to view the previous weeks files

Top I Derivatives guide I Likely triggers I Technicals I Reco's I

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Top I Derivatives guide I Likely triggers I Technicals I Reco's I

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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