The Professional Ticker Reader TM

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June 19, 2004

Markets slip further. Sensex sheds 63 points.

Lower volumes, negative breadth as bulls stay away.

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	4810	4863	4696	4769	62.72
BSE - 200	626	632	613	618	09.85
NSE - 50	1508	1525	1474	1491	17.25
Dow  Jones	10416 6	Nasdaq	1987 13	FTSE	4506 22
Advances	5248	Declines	6787	Put / Call trades - 52046 : 101989
FII Investments	Rs  640 Crs Jun 1 - 17		Domestic Funds	Rs  264 Crs Jun 1 - 17

The value of  shares advancing was Rs. 11,917 crores ( previous week Rs. 12,251 crores) and the value of shares declining was Rs. 12,799 crores ( previous week Rs. 13,734 crores). This indicates a broader selling bias. The total traded volume on the BSE was Rs. 7,367 Crores ( previous week Rs. 7,874 Crores). The total traded volume on the NSE  was Rs. 17,399 Crores ( previous week Rs. 18,204 Crores).

The week saw lower volumes and a negative market breadth as the indices shed over 1 % in values. The fall was more due to lack of buying support than any selling pressure. The market breadth continued to stay negative and the undertone was brittle. The technology sector was the least hammered in the fall and the week saw only 40 % of the traded volumes being transacted on uptick days. The poor traded volumes continue to remain a cause of concern as retail participation is lacking. The FII's remained net buyers during the week and bought equities worth Rs 105 crs. The Sensex  was boosted by Bajaj Auto, BHEL, HDFC Bank, Infosys, ONGC, Reliance, Telco, Wipro and Zee Telefilms. The Sensex  was dragged down by ACC, Bharati Tele, BSES, Cipla, Dr. Reddy, Grasim, Guj Amb Cem, HDFC Ltd, Hero Honda, Hind Lever, HPCL, Hindalco, ITC, MTNL, Ranbaxy, Satyam Computers, SBI and Tisco. The rupee ended the week at 45.67 levels ( 00.51 ) against  the US $. Overall, the week was in line with our expectations. Click here to view previous weeks editions

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

The markets are in a downward drift and are unlikely to react sustainably to positive news triggers. The most immediate trigger is the derivatives series expiring on June 24, 2004. The market forces are likely to determine the demand supply balance of positions as outstanding positions are squared up / rolled over. So far, the outstanding positions seem to be increasing and that is an optimistic sign. The other factor that will determine the future course of action is the rapidly falling implied volatility. Our investors will recollect that we have been providing volatility figures and the same had exceeded 100 %, which resulted in multiplication of margins payable. Coupled with the mark-to-market differences, the liability knocked many a bull out of business. Now that volatility is down by 20 points, margins will be more affordable ( though still higher than the 12 month average ). It remains to be seen, whether the bulls stage a comeback on cheaper entry or bears hammer the markets further down. The end of the coming week will have provided a reasonably clear picture. The international oil price is also a factor, and so is the US federal reserve meeting to determine interest rates. Should there be a rate hike in USA, expect FII selling, however marginal. As suggested by us in the previous week, the markets remain shallow. Click here to view previous weeks editions. Also refer to our current weekend special report on time / price projections of the markets, as a sequel to the report issued a fortnight ago.

The overseas markets have been steady and are unlikely to provide any major guidance in the immediate future. Overall, expect minor pullbacks in the indices, and all significant upmoves to be met by selling pressure.

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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