Financial Daily from THE HINDU group of publications
Wednesday, May 18, 2005
Financial Daily from THE HINDU group of publications Wednesday, May 18, 2005 |
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Markets
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Stock Markets Columns - Ear to the ground Forging ahead on value buying?
WITH brokers anticipating a recovery in the auto sector, the stocks of mid-cap auto ancillary companies have seen a revival. Leading this pack for the last couple of days is Ramkrishna Forgings. The stock touched its 52-week high of Rs 77.80 on Tuesday. It shed steam towards the end of trade to close the day at Rs 70.90. Volumes also were robust with the BSE registering trades of over 8.5 lakh shares. Dealers say that since auto and auto ancillary scrips have lost market interest significantly from their levels while the Sensex was trading around 6800, value buying is providing a lift now. Mid-cap auto ancillaries have come into focus with many investors now looking for undervalued mid-cap stories. Ramkrishna Forgings is one such, they say.
Beware of bearish bell The overwhelming feeling among market participants is that it could turn bearish when the BSE Sensex touches the 6600-mark. Foreign institutional investors are cautiously factoring in all global developments and some consider the Indian markets to be currently overvalued. Market expectation is that at the 6600-level, FIIs may book profits and take some money away from the table. Unless any major economic policy level decisions are announced in the meantime, FIIs would prefer to maintain cash reserves than invest in uncertain times, brokers say. The liquidity in the rally since May 2004 has been largely provided by FII investments. If these inflows slow down to a trickle, overall sentiment in the market would be affected on a "geometric scale", believe market participants. Markets have been largely range-bound during the last few weeks and expectations are that this would continue to be so in the short term.
Veena Venugopal
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