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

Jayanta Mallick

THE stock market, firmly in the grip of speculators, has identified props to push up the sentiment.

With the Gujarat polls going the BJP way, the punting point now is the next meeting of the Cabinet Committee on Disinvestment scheduled this week.

The frontrunners — speculators and traders — have worked on the premise that if BJP sails through in Gujarat, the reforms process is likely to gain momentum. Now that the party has won a landslide there, the sentiment is positive for reforms.

Talk to a trader on Dalal Street or Lyons Range, he will bring down reforms only to the disinvestment process involving HindustanPetroleum Corporation Ltd, Bharat Petroleum Corporation Ltd, Engineers India Ltd and Nalco.

In search for new themes to expand the current rally, the market drivers have once again turned to the disinvestment magic.

In the process, the operators and traders last week had been betting on the BJP prospects at the hustings rather than on stocks. The Sensex has continued its gaining spree for seventh consecutive week.

However, the weekly gain in the benchmark index of 36.68 points last week was smaller compared to the advances it had made in the four preceding weeks.

The strategy for the operators for the remaining part of December is to keep the Sensex in the green. The profit-booking has been largely restricted to an intra-day activity. And most interestingly, the frontline stocks in the buoyant sectors, such as IT, banking and automobiles, are being juggled around to keep the indices' movement under control.

This week, the market is likely to avoid a major correction. The sentiment is likely to remain buoyant. The activity may spread further to the old economy and second rung stocks.

According to Mr Darshan Mehta of moneypore.com, in post-Gujarat election results, the market would consolidate on the theme of marked improvement in industrial activity in the third quarter and look forward to better bottomlines from the corporates. "Around January, the FII investment flow is also likely to be substantially higher.

So the market is gearing up for a full-blown bull rally in January," he added.

Last week, the advance and decline ratio was negative for three sessions, according to Mr Saumil Trivedi, a technical analyst.

Mr Trivedi said the Sensex need to cross the range of 3,350-3,380 with a clear forward thrust to reach the next orbit. "If the Sensex remains below 3,320 points, the consolidation period is likely to continue," he added.

According to the charts, the Sensex level of 3,240 is to provide a strong support level. The next major support should be available at around 3,190, Mr Trivedi felt.

Send this article to Friends by E-Mail
Comment on this article to BLFeedback@thehindu.co.in

Stories in this Section
Final cash offer at Rs 40 to Madura Coats shareholders

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