The Professional Ticker Reader TM

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May 29, 2004

Markets let blood. Sensex down 126 points.

Poor volumes, negative breadth as CMP gets thumbs down.

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	4993	5163	4821	4835	126.18
BSE - 200	653	676	626	627	22.42
NSE - 50	1563	1625	1504	1508	51.45
Dow  Jones	10188 222	Nasdaq	1987 75	FTSE	4431 01
Advances	5434	Declines	7003	Put / Call trades - 40325 : 94966
FII Investments	Rs  3461 Crs May 1 - 27		Domestic Funds	Rs  1231 Crs May 1 - 27

The BSE & NSE combined weekly value of  shares advancing was Rs. 12,234 crores ( previous week Rs. 20,105 crores) and the value of shares declining was Rs. 18,928  crores ( previous week Rs. 13,691  crores). This indicates a broader selling bias. The total traded weekly volume on the BSE was Rs. 9,476 Crores ( previous week Rs. 10,764 Crores). The total weekly traded volume on the NSE was Rs. 21,752 Crores ( previous week Rs. 23,256 Crores).

The markets saw another bearish week as the indices lost over 2 % weightage on sustained unloading by players on all advances. The market saw a withdrawal by the retail players and the FII's as the CMP was not well accepted by market participants. The traded volumes were lower on a week-on-week basis and the market breadth was negative on sustained offloading. Barring the technology sector, almost all segments saw a selling bias and turned weak. The Sensex  was boosted by Bajaj Auto, BHEL, Dr Reddy, HDFC Bank, Hindalco, Infosys, Satyam Computers and Zee Telefilms . The Sensex  was dragged down by ACC, Bharati Telefilms, BSES, Cipla, Grasim, Guj Amb Cem, HDFC, Hero Honda, Hind Lever, HPCL, ICICI Bank, ITC, MTNL, ONGC, Ranbaxy, Reliance, SBI, Telco, Tata Power, Tisco and Wipro . The rupee ended the week at 45.48 levels ( 00.19 ) against the US $.

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

The market is likely to see a choppy week ahead as the participants are likely to be haunted by the similarity between May 14 - 17 ( black Monday ) and the fall on Friday ( May 28 ) which may cause a downward pressure on the markets. The FII's have offloaded aggressively and continue to withdraw funds from the Indian markets. The domestic institutions are also selling sporadically. The directional guidance emanating from large players is therefore making retail players nervous. There is likely to be a great pressure on players, especially bulls, due to high mark-to-market payments and a steep hike in volatility margins. Even if the margins are reduced, the bears will be at an advantage as short selling will become even more cheaper. There are strong chances of selling by financiers who have lent monies against shares as collateral as prices have fallen. This likely to cause a further erosion in sentiments. The F&O indicators show two important aspects - the outstanding open positions are now below the Rs 4,500 crs mark and that the contracts are showing a downward slide in strike prices due to sharp falls in the cash markets. Since the markets are very shallow due to light open interest, volatility will be extremely high and small bouts of buying / selling will cause big movements. International crude prices will continue to govern sentiments in the short term. For a detailed study on the estimated date of bottoming out of the markets, please await our special edition " Will black Monday repeat itself ?"

The overseas markets have shown a recovery on a week-on-basis as oil prices have come down from their highs of US $ 41.60 levels on assurances of an output hike from Saudi Arabia. That is likely to cushion the downsides in the near term.

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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