The Professional Ticker Reader TM

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Aug 14, 2004

Markets retrace steps. Sensex dives 94 points.

Steady volumes, negative breadth as bulls pare exposure.

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	5182	5269	5084	5102	94 .07
BSE - 200	677	687	661	664	14 .38
NSE - 50	1633	1658	1591	1598	35 .20
Dow  Jones	9825 10	Nasdaq	1757 20	FTSE	4301 36
Advances	5974	Declines	7251	Put / Call trades - 43497 : 99610
FII Investments	Rs  107 Crs Aug 1 - 12		Domestic Funds	Rs  269 Crs Aug 1 - 12

The value of  shares advancing was Rs. 12,079 crores ( previous week Rs. 16,443 crores ) and the value of shares declining was Rs. 18,264 crores ( previous week Rs. 14,214 crores). This indicates a broader selling bias. The total traded volume on the BSE was Rs. 9,755 Crores ( previous week Rs. 9,136 Crores). The total traded volume on the NSE  was Rs. 20,675 Crores ( previous week Rs. 21,630 Crores ).

The markets saw a persisting weakness as the indices lost almost 2 % in values on bull unloading. The traded volumes were steady, but the market breadth was negative as the above table indicates. The undertone was nervous as the inflation, caused by high crude prices hounded the sentiments. The capitalisation of the breadth was much more weaker, which shows a sustained selling on the index frontline counters. The Sensex  was boosted by ACC, Bajaj Auto, Bharati Tele, BHEL, Guj Amb Cem, Hindalco, ICICI Bank, Ranbaxy, Reliance Energy, SBI and Tata Power . The Sensex  was dragged down by Dr Reddy, Grasim, HDFC Bank, HDFC, Hero Honda, Hind Lever, HPCL, Infosys, ITC, L&T, MTNL, ONGC, Reliance Inds, Satyam Computers, Telco, Tata Motors, Tisco, Wipro and Zee Telefilms . The rupee ended the week at 46.31 levels ( 00.06 ) against  the US $. Overall, the week in line with our expectations. 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 pressure from the international crude oil prices. The oil worries have been a consistent factor that we have been pointing to our investors for over a month. The resultant inflation and the possibility of domestic petro prices hike is likely to exert a downward pressure on sentiments.

• The FII's have turned sellers and that is a sign of caution for the bulls. The effect is likely to be adverse on the sentiments. The domestic mutual funds continue to press sales at higher levels.

• Of the entire traded turnover, 61 % of the trades were transacted on positive market breadth days, which indicates that the bulls are attempting to push markets higher.

• The default of small co-operative banks is likely to dampen investor sentiments and downward pressure on the prices in the sector.

• The F&O segment shows a fall in the open interest in futures and a small rally in the outstanding call options. Qualitatively speaking, it signals a defensive / backfoot action on the bull camp.

• The lower implied volatility is signalling a drift in sentiments and lower margins on F&O trades is likely to be an incentive for the bears to press sales.

• The overseas markets are under pressure and are likely to cap the upsides in the domestic markets.

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

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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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