• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Jayanta Mallick

Seasoned market players feel that there may be churning of portfolios in favour of select pharma, IT, cement, steel, auto and bank stocks. However, eyes are likely to be glued on the fundamentals of the individual stocks.

HEAVY buying by domestic funds in the stocks of Wipro, Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) saved the market last week from a greater fall.

"It appears that quite a few local funds entered the two stocks at lower levels. But some of the foreign funds beat a hasty retreat from the PSU counters," Mr Abhay Aima, a market analyst said.

According to analysts and brokers, the stock market is still in the bear zone and the benchmark index — BSE Sensex — may droop further.

"The aftershock of the Cabinet Committee on Divestment's postponement of HPCL and BPCL privatisation was largely cushioned by significant purchases of the two stocks at lower levels. More interestingly, the Wipro counter saw unusual volumes of purchases based on rumours of the company obtaining significant orders from overseas clients," said a market analyst.

The Nifty, thanks to Wipro's higher weightage, could largely avoid the onslaught triggered by the drop in sentiment. Though the company scotched the rumours, the Nifty fared better than Sensex last week.

Some market participants smelt a rat in the volumes and intra-day price volatility in the Wipro counter. But majority of the market players ruled out the possibility of a manipulation and described it as part of a speculative game. "True, some of the players were trapped. But nothing more to it," said Mr Arun Kejriwal, an analyst.

"Wipro is a difficult stock to rig because of its price level and liquidity condition. With scores of day traders taking short-term positions in the market, rumours tend to get heightened and influence the trading pattern and the prices," Mr Aima observed.

According to him, the market is at the crossroads. "As of now (read as the beginning of the week) there is hardly any trigger, neither positive nor negative. I presume, the market will be dull and range-bound until something dramatic thing happens," he said.

As the retail investors have recoiled, the FIIs have become net sellers and operators have turned cautious; consequently, the market lacked players who can move it.

Seasoned market players feel that there may be churning of portfolios in favour of select pharma, IT, cement, steel, auto and bank stocks. However, eyes are likely to be glued on the fundamentals of the individual stocks.

"Many of the fertiliser counters were looking up in view of revival of a monsoon. But the postponement of Rashtriya Chemicals and Fertilisers' disinvestment plan to 2004 may well prove to be a damper for the PSU fertiliser counters," a National Stock Exchange dealer felt.

According to Mr Kejriwal, the elections in Kashmir, which begins this week, may throw up negative news and affect the market sentiment. "Otherwise, the market is likely to drift downwards albeit gradually. However, if the Sensex pierces the resistance level at 3075, there could be panic in the market. There are more sellers than buyers now and very few would like to a contrarian view in a weak market," Mr Kejriwal said.

"Last year, September 21 had proved to be ominous, when the Sensex had touched the low of 2594.87. This year it is hoped that this bust story will not be repeated in September," Mr Kejriwal quipped.

Send this article to Friends by E-Mail

Stories in this Section
PSUs' downfall affects NAVs

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line