Weekly market view
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Oct 04, 2003 |
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The value of shares advancing was Rs. 18426 crores and the value of shares declining was Rs. 7495 crores. This indicates a broader buying bias. The total traded volume on the BSE was Rs. 8457 Crores. The total traded volume on the NSE was Rs. 17639 Crores.
The week saw a strong consolidation of the previous weeks rally. The indices have closed nearly on their weekly highs and that is a sign of a bullish undercurrent. The traded volumes were higher ( adjusted for a shorter trading week ) and the market breadth was widely positive. The capitalisation of the market breadth was also positive as the above table indicates. This shows a secular buying momentum on the heavy-weights. The indices have now closed above their crucial hurdles of 4475 and 1432 on the Sensex and Nifty respectively. The technology sector has started showing signs of slacking off as the US $ has slipped sharply. The old economy however more than made up for the loss. The Sensex was boosted by ACC, Bajaj Auto, BHEL, BSES, Cipla, Colgate, Dr. Reddy, Grasim, Gujarat Ambuja Cements, HCL Tech, HDFC, Hero Honda, Hind Lever, HPCL, Hindalco, ICICI Bank, L&T, MTNL, Nestle, Ranbaxy, Reliance, Satyam Computers, SBI, Telco, Tisco and Zee Telefilms . The Sensex was dragged down by Castrol and ITC . The rupee ended the week at 45.39 ( + 00.46 ) levels against the US $. Our investors will recollect our advise last week and agree that the week gone by has been completely in line with our forecast. Click here to view previous reports
The markets are likely to react positively to the governments announcement of a possible split of IOC and disinvesting the retail portion of the company. This indicates a political will to proceed with the reform process and sends out encouraging signals to the international agencies. The overall impact will that be of a feel good factor. The upcoming results season will see a building up of speculative positions as the market players take bets on their favourite stocks. The US $ which has crashed vis-a-vis the Rupee is likely to worry software sector players as Infosys & other frontline companies had stated in their previous quarter numbers that a 45 level of the US $ was comfortable in their forex calculations. If the rupee rallies beyond the 45 mark, expect trouble on the software stocks. The rally is likely to be fuelled by the old economy stocks and within them, the automobile, banks, cyclicals, power, telecom, paper and ancillaries. The FII inflows have been positive and for a change, even the domestic mutual funds have turned net buyers. The put / call ratio (PCR) suggests bullishness and the net long positions have touched Rs 7467 crs. The lower stock futures position ( refer table above ) is a slight worry. On the global market front, the US markets have made the largest weekly gains in 4 months on the back of strong employment data. The economic recovery theory is gaining ground there and the markets are below their near term resistance levels. Should there be a breakout in the US markets, expect the domestic rally to gain further momentum. Overall, our investors should expect an excellent Diwali this year - barring unexpected developments.
The daily bar chart of the Nifty shows a breakout above the previous resistance of 1432, which is a sign of bullishness in the undertone. The traded volumes have been healthy and market breadth positive. Of the entire traded weekly volumes, the entire transacted ticket size has been on positive market breadth days which shows an underlying optimism in the markets. Our investors will remember that we have been bullish throughout the corrective phase and re-inforce our stand that the markets are in for good times ahead. We feel that the Nifty has the steam to touch 1465 / 1470 in the coming week effortlessly and even surge higher. On the downside, we expect a good support base at the 1400 levels.
Our outlook on the Nifty is that of bullishness for the week ahead.
Our investors are advised to hold existing long positions and fresh trades should be executed on the long side as the outlook is bullish. For stock specific recommendations, please refer to our special edition - " Flavours of the week." Click here to view previous editions of Flavours of the week reports. Standby for fresh recommendations via SMS on a real - time basis. Your feedback is important ! Please click here to let us know your views. Click here to inform a friend about this page on our website.
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.
Legal notice :- The Professional Ticker Reader is a trademark of Bhambwani Securities (P) Ltd. and any unauthorised replication / duplication in part or full will be infringing our trademark and will result in legal action being enforced on the infringing persons / parties. |
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Your feedback is important ! Please click here to let us know your views. Click here to inform a friend about this page on our website.