Tuesday, Aug 26, 2003
Tuesday, Aug 26, 2003 |
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By Our Special Correspondent
The Bombay Stock Exchange 30-Share Sensitive Index (Sensex) opened with a positive note at 4149.82 in the morning and attempted to build up on last Friday's gains. The Sensex notched up a new high at 4170.58 and then caught in a narrow band for about two hours. Then it turned slightly weak when the news came in that the BJP and the Chief Minister, Mayawati, were at loggerheads in Uttar Pradesh. The market lost around 30 points and many pivotals fell from their intra day-high. Later on the news about the bomb blast came in and there was a huge wave of selling across all sectors. The Sensex quickly lost over 200 points from its intra-day high making a low of 3943.66. Buying re-emerged in pivotals and this took the index back above 4000. It traded above 4000 for the rest of the day and finally closed at 4004.63, losing 120.49 points from its previous close of 4125.12. The NSE Nifty also shed 40.05 points to end at 1271.10 compared to the previous close of 1311.15. Volumes remained heavy and the mood was distinctly weak with four scrips declining for every advancing scrip. While there were 427 advancing scrips, the number of declines was at 1622. Market participants were anticipating a correction over the past several weeks and it is likely that the correction may have begun. Some of the stocks that lost ground included Zee Telefilms, Gujarat Ambuja, Hindustan Lever, HPCL and ITC, while there was buying in Ranbaxy Lab. Only two scrips, HDFC and Ranbaxy, out of the 30 scrips in the BSE index could manage a positive close. There was broad based selling in sectors particularly technology, banking, steel cement and some refinery stocks. However the index recovered slightly to close at 4004.63. The Nifty was down five per cent intra-day to 1245.85 before recovering to close at 1271.10 points. The Bombay Stock Exchange witnessed a volume of 23.3 crore shares and the National Stock Exchange 46.7 crore shares. Losers outnumbered gainers by 1422 to 335 on BSE. SAIL topped in volumes on BSE and NSE with trading of 10 crore shares on both the exchanges. Other significant toppers on volumes were Pentamedia (2.7 crores), Satyam Computers (2.1 crores), Essar Steel (1.9 crores) and IFCI (2 crores). "The markets could shake off the uncertainty involving the political situation in Uttar Pradesh. However, it would be vary of any fresh bomb blast within the city. Large positions have been built up in the derivatives segment and this month's expiry — of this month's contracts — is on Thursday. This could result in a slight weak bias for the rest of this weak,'' said M. K. Srivatsan, Senior Associate Vice-President, Equity Research, Darashaw and Co, a broking firm. "Technically, today the market reached the upper-end of an up-sloping trend line and sold off from that level,'' said Mr. Srivatsan. On the downside the market took support at a key level at 3950 and managed to close above 4000. Failure to decisively move above today's high of 4169 could lead to further declines over the coming days. There could be some selling pressure around 4100 mark. The Sensex was also nearing a serious resistance zone between 4200 and 4300. However, if the Sensex manages to remain above today's low 3943, then further upside is expected. There is no cause for worry for a longer term investor,'' he added. Today's was an event-driven correction and one will need to watch the market action to determine if the weakness will continue for some more days.
Rupee dips
The rupee ended at a six-day low today at 45.90 a dollar compared to its previous close of 45.82. Immediately after the bomb blast the rupee fell and touched nearly 46 to a dollar. The rupee opened at 45.84/45.85. "There was some panic buying immediately after the bomb blast and the inter-bank rates rose to 45.98/45.99 per dollar. But generally this happened after 2 p.m. Exporters took advantage of the fall in spot rupee and sold some receivables and the inter-bank rate closed at around 45.89/45.90. Tomorrow the market could move in a range of 45.85 to 45.95 levels. As we are approaching the month end, there could be some demand in the market this week,'' said K. N. Dey, Director, Basix Forex, a forex dealing firm. In the forward market, the benchmark six-month premium rose to around 2 per cent today and would range around 1.8 to 2.2 per cent tomorrow. Analysts feel, exporters will encash as soon as the premium crosses 2 per cent.
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