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Bullish undercurrent may provide the charge

Rajesh Chandramouli

CHENNAI, June 18

THE stock markets are poised for a strong upward movement this week. The markets are likely to open higher on Monday and may stay bullish for the early part of the week.

According to market sources, profit-taking by mid-week is expected and this could pull down the BSE Sensex a bit. Mr. Bharat Patel of JHP Securities said: ``The undercurrent is bullish and I see the Sensex move between 4400 to 4900 points this week.'' Th e BSE Sensex closed at 4764 points on Friday.

A technical analyst said that the 4954 points is the resistance level and if the markets are able to breach that level, markets could go past the 5000-mark.

The overall sentiment is ``good''. The week should see an overall movement of the markets. ``I don't think that the upward movement would be restricted the new economy stocks; we will see stocks in the old economy also notch smart gains,'' Mr. Patel said .

``I think that counters such as State Bank, MTNL and Tisco should attract buying interest, based on market grapevine and enquiries,'' he added.

Mr. Mukesh Shah of Shah & Shah, said that upswing in markets would continue. ``Basically, I think that counters such as Infosys and Satyam would lend direction to stocks in the new economy,'' he said.

During the week (up to Thursday's trading) foreign institutional investors (FIIs) were net sellers to the extent of Rs. 269.20 crores, and for June, they were net sellers worth Rs. 407.10 crores, as per SEBI statistics.

Mr. Nayan Mehta of Emkay Share, said the market looks poised for upward movement. ``This is largely a speculative rally, and therefore, you can witness unexpected profit-taking,'' he said, pointing to the negative FII investment.

As per technical charts, the Sensex could face some resistance at 4850 levels. But even that can be discounted as market players expect the Monday opening above that level. ``I would say the market can move between 4500 and 5100 points for the week,'' Mr . Mehta said.

The badla session on Saturday at BSE saw the average rates hover around 16 per cent as against 14.75 per cent the previous week. The badla turnover was up at Rs. 2,347 crores as against Rs. 2,077 crores the previous week. The increase in the average carr y-forward rates just shows an improvement in the market sentiment, market players say.

Zee Tele saw a 50 per cent increase in badla turnover. Over 36 lakh shares were traded on Saturday. Mr. Shah said huge long positions were being built by market players. ``Once we see some upward movement here, people would further short-sell and thereby contribute to the increase of the stock price,'' he added.

``The market has absorbed the entire institutional selling and I feel that the upward movement is very much on cards,'' Mr. Shah added.

Mr. Shekar Sathe, Chief Executive Officer of Kotak Mutual Fund, said that the ``comfort factor'' is still a wrong perception. ``I still think that there is a possibility for the markets to fall,'' he said and added that he will hold a major portion in ca sh rather than in equities.