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June 05, 2004

Markets recover on bear covering. Sensex gains 54 points.

Poor volumes, negative breadth even as FII's stage a comeback.

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	4760	5012	4665	4889	53.61
BSE - 200	619	647	605	629	02.29
NSE - 50	1507	1566	1456	1521	12.35
Dow  Jones	10243 55	Nasdaq	1977 10	FTSE	4454 24
Advances	5145	Declines	7021	Put / Call trades - 35810 : 75410
FII Investments	Rs  369 Crs Jun 1 - 3		Domestic Funds	Rs  97 Crs Jun 1 - 3

The value of  shares advancing was Rs. 15969 crores ( previous week Rs 12,234 crores) and the value of shares declining was Rs. 13442 crores ( previous week Rs. 18,928  crores). This indicates a broader selling bias. The total traded volume on the BSE was Rs. 9089 Crores ( previous week Rs. 9,476 Crores). The total traded volume on the NSE  was Rs. 20450 Crores ( previous week Rs. 21,752 Crores)

The markets saw a recovery in the values on the back of FII purchases coupled with bear covering at lower levels. The FM's assurances to the market players seemed to have had a soothing effect on sentiments - atleast for now. The traded volumes however remained lower, which is a cause for concern and a constant red herring for the bulls. The market though negative, was improved over the previous week. The undertone remained cautious and the retail segment continued to abstain from active participation. The Sensex was boosted by Bajaj Auto, BHEL, BSES, Grasim, HDFC, Hero Honda, Hind Lever, HPCL, Hindalco, ICICI Bank, Infosys, MTNL, ONGC, Ranbaxy, Reliance, Satyam Computers, SBI, Telco, Tisco and Zee Telefilms . The Sensex  was dragged down by ACC, Bharati Tele, Cipla, Dr Reddy, HDFC Bank, ITC, Tata Power and Wipro . The rupee ended the week at 45.12 levels ( 00.36 ) against  the US $. Click here to view the previous weeks file

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

The markets are likely to remain under the bear hammer as bulls are lacking in resources and conviction even as the bears have made a killing. The FII selling was also a cause for major weakness in the sentiments. Though the FII investment figures are positive, the domestic retail segment is unwilling to participate in a significant way in the buying process. The domestic mutual funds have turned net sellers and are offsetting some of the gains in the markets. Traded volumes need to improve on rallying days to imbibe confidence in the markets. So far, falls are accompanied with high volumes and rallies are on thin volumes. This leads us to believe that smart money is still distributing stocks at higher levels. The oil prices will have a major bearing on sentiments in the near term. OPEC seems to have controlled the over heated sentiments for now, that should see a sense of relief in the international markets in the short term. The F&O segment also points towards a cautious undertone as the traded volumes have dried down and the outstanding open interest has increased significantly on a week-on-week basis. The implied volatility is settling down, which shows that stability is returning to the markets gradually.

The overseas markets have been steady and are unlikely to exert significant influence on the domestic sentiments in the near term. Overall, we expect an improved undertone in the near term. Click here to view the previous weeks file

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

This segment is for paid subscribers only.

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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