The Professional Ticker Reader TM

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Dec 13, 2003

Markets cover further ground. Sensex gains 184 points.

Markets at 44 month highs, US markets aid rally.

Weekly statistics

The value of  shares advancing was Rs. 22,844 crores and the value of shares declining was Rs. 12,116 crores. This indicates a broader buying bias. The total traded volume on the BSE was Rs. 11,387 Crores. The total traded volume on the NSE  was Rs. 23,675 Crores.

The markets saw a further upmove in the values as follow up buying support was seen at lower levels from institutional as well as individual players. The inflows came from FII's and domestic mutual funds as the above table indicates. The traded volumes were marginally lower than the previous week as the players lacked a strong buying conviction at higher levels. The US markets saw a strong performance as the economic data that filtered in was positive. The market breadth was positive in numerical and capitalisation terms which shows buying by stronger hands. The rally was seen getting broader based as the bulls are slowly but surely gaining control over the markets. The Sensex  was boosted by ACC, Bajaj Auto, BSES, Dr Reddy, Grasim, Gujarat Ambuja Cements, HDFC, Hero Honda, HPCL, Hindalco, ICICI Bank, Infosys, ITC, L&T, ONGC, Ranbaxy, Satyam Computers, SBI, Telco, Tisco, Wipro and Zee Telefilms. The Sensex was dragged down by BHEL, Cipla, Hind Lever, MTNL and Reliance. The rupee ended the week at 45.54 levels ( + 00.06 ) against  the US $. The week was completely in line with our expectations as we had advocated that the markets were undergoing a routine bull market correction, which would be followed by a rapid recover ( click here to view the previous reports).

Changes in outstanding futures positions.

Note - The put call ratio is at 0.30 : 1 ( previous week 0.23 : 1)

The value of outstanding long positions (gross) is Rs 9,528 crs. ( previous week Rs 10,473 crs )

The markets are likely to remain bouyant on the back of the firm US markets. The FII inflows continue unabated and the domestic mutual funds are net buyers too. Our investors will recollect that we had advocated last fortnight itself that FII's were unlikely to slow down their purchases due to year end NAV compulsions. In the absence of redemption pressure, the only logical thing to do would be to support prices. Since this is a quarter ending for the domestic mutual funds also, they would also resort to supporting the stock prices of index heavy-weights and widely owned scrips. The government has been making positive statements about the stock market and the peace initiatives with Pakistan are collectively likely to be major positives for the markets. Though the above derivatives figures point towards a cautious picture as the outstanding positions have shrunk marginally, and the Nifty shorts are exceeding the longs, we feel the hesitation by the retail segment will turn into belief at higher levels only. The US $ is seeing signs of stability and that will impart a feel good factor to the technology stocks. Due to the higher weightage of these stocks, the overall market outlook will get a fillip. Overall, we expect a positive week ahead with possibility of minor profit taking at higher levels.

The weekly bar chart of the Nifty shows a rising bottoms and tops formation and a breakout above the 1685 levels. Last week, we had advocated that the markets would make a secular upmove only above the 1685 levels and this level has been overcome. The immediate target for the Nifty is the 1720 levels and thereafter the 1745 levels. The rally is likely to gain upward momentum above the 1750 mark. Our target for the Nifty is 1800 + levels over the medium term as per our previous guidance. On the lower side, expect the 1622 levels to be a firm support in the near term. 

Our outlook on the Nifty is that of optimism, barring minor corrective falls.

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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