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Jayanta Mallick

THOUGH a sense of bullishness has buoyed market sentiments, analysts and brokers are guarded in articulating their views for this week.

The BSE Sensex last week stopped short of crossing the critical resistance of 3,040. The benchmark index gained 2.61 per cent or 77.07 points during the past week.

According to Mr Saumil Trivedi, a technical analyst, the notable features of the Sensex movement were that it closed around the week's high and trading on the last two days was very positive with the index advancing through the day accompanied by rise in volume. Also, the institutional fund flow was robust compared to a few previous weeks.

In his opinion, the Sensex may cross the 3,040 mark and get set on a course of a strong sustainable rise. "The advance is likely to be accompanied by high intra-day volatility," he added.

Mr Vivek Mahajan, a broker-analyst, felt that last week definitely witnessed a trend reversal. "However, market has not developed enough width yet. The declines still outnumbered the advances," he observed. According to him, the last week's upward breakout was not enough volume to clearly indicate the onset of a bull phase. "We may see corrections and consolidation before a distinct beginning of a bull run."

There is a difference of opinion regarding the short-term trend for the tech sector, which led the market last week. While Mr P.N. Vijay, a market analyst and member of the BJP's economic cell, felt that the rally in the frontline tech counters would continue, Mr John Band, an independent analyst, thought the top rung tech stocks were fully valued at the current prices.

Mr Mahajan was of the opinion that top five IT counters may see a correction this week. Mr Vijay felt that there were reasons to be bullish about the stocks such as Digital, Polaris and HCL Tech.

However, every one seemed to be unanimous that the outsourcing by the US and European companies from India was becoming a factor to reckon with. "There is a certain amount euphoria. But the Indian software companies need not necessarily be the only beneficiaries, competition may hot up soon in this area of business too. In the case of BPO also, the worrisome factor is that too many players are joining the bandwagon depressing the rates to ridiculous levels," Mr Band felt.

In Mr Mahajan's view, cement and steel sector counters may see increased activity this week.

According to Mr Vijay, "among the PSUs, Shipping Corporation's disinvestment trigger was getting stronger with the Union Shipping Ministry ironing out the problems related to documentation, security issue and the special purpose vehicles". Balmer Lawrie was the other PSU heading for disinvestment without hitch, he said.

In his opinion, the Defence Minister has toned down his opposition to disinvestment in relation to the national security concerns.

"After the three- month period of review ending in December, the divestment exercise will take a clearer direction and momentum," he added. (Mr Vijay disclosed that he has investments in Digital, HCL Tech and Polaris counters).

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