Sunday, Dec 15, 2002
Sunday, Dec 15, 2002 |
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By Oommen A Ninan
There has finally been some positive news regarding disinvestment of public sector enterprises (PSEs) but the economic outlook continues to be grim. "The market has rallied from 2900 and it is likely to be in a narrow range for the moment awaiting FII inflows, third quarter results and budget expectations," said S. Naren, Director, HDFC Securities. "We still feel that multinational pharmaceutical stocks are attractively valued, like Novartis, Pfizer and the like," he added. The market will await the launch of telecom services by Reliance on December 28. The price movement in Infosys will be more speculative in view of its impending American Depositary Receipts (ADR) issue. The Gujarat election outcome would also be a critical factor in the short-run. "A 100 point rally from these levels can be considered for profit booking," Mr. Naren felt. "In the medium term the market would remain bullish," said Imran Contractor, Head, Equity Research, Stratcap Securities Pvt. Ltd. According to him, business confidence is positive and disinvestment of PSEs is coming back on track. With improving profitability of companies, the market seems to be on the upward trend. However, in the short run, said Mr. Contractor, there might be some hiccups due to election results not being favourable to BJP. "Banking stocks are in the limelight as they are able to recover their non-performing assets (NPAs) with the Securitisation and Reconstruction Bill being passed by Parliament. As stocks of technology sector have already gone up major upside seems doubtful," he added. The benchmark Bombay Stock Exchange 30-share sensitive index (Sensex) gained 36.68 points at 3342.97 during the week ended December 13 against the previous week's close of 3306.29. On the National Stock Exchange the S&P CNX nifty moved up by 16.40 points to 1086.20 from 1069.80. Stocks of PSEs and banks were in the limelight last week. The renewed commitment of the Government to divest the PSEs and the passing of Securitisation and Reconstruction Act revived the stocks of PSEs, banks and other financial institutions which languished for some time due to uncertainties. The Sensex gained for the seventh consecutive week, the notable feature being, the week-on-week advance of one per cent (36.68 points) was much smaller as compared to the advances in th previous four weeks, said Saumil Trivedi, Vice-President, Asit C. Mehta Securities. Further he said that the intervals of the market were negative for three sessions out of four when the Sensex gained, which is a cause of concern. "Range of 3350 to 3380 needs to be crossed forcefully to allow the Sensex to post higher levels. If the Sensex continues to remain below 3320, the consolidation phase is likely to continue with 3240 as a strong floor and 3190 as a major floor," Mr. Trivedi felt.
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