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Interest may shift to FMCG scrips

Rajesh Chandramouli

STOCK markets are expected to remain range-bound in the coming week. A run-away rally in prices looks a remote possibility. Market players peg the Sensex movement between 4,700 and 5,100 points.

They also expect the interest to shift from infotech counters to FMCG stocks in the week ahead. This is largely due to a large overseas brokerage house changing the weightage for IT stocks from overweight to neutral and changing the weightage for FMCG st ocks from neutral to overweight.

Mr. Nayan Mehta of Emkay Share said that there were enough indications to this effect. ``On Friday, we saw SmithKline Beecham clock gains in excess of 15 per cent and we also saw significant buying in Procter and Gamble,'' he said.

He added that week-on-week, the market should see an increase in the Sensex by 200 to 300 points. On Friday, the BSE Sensex closed at 4,856.82 points. Mr. Mehta also said that the market would see support at 4,800 levels.

The ``huge outstandings'' is also a cause for concern for the markets. Though, the badla rates still hover around the 15 per cent mark, they feel that it would be ``a catastrophe'' if buying does not come in now.

They point out to the situation in mid-February, when the markets peaked, even as there were huge outstandings. The only difference between mid-February and now is that the average badla rates were much higher then. ``A similar situation was prevalent th en, and the markets tumbled,'' said a senior BSE member.

The build-up of the outstandings indicates that whatever buying has been witnessed, it has been largely due to speculation, according to SBI Mutual Fund sources.

Mr. Ved Prakash Chaturvedi, Chief Executive Officer, Cholamandalam Mutual Fund said, ``We will continue to see such range-bound movements as we are not seeing any huge inflows into the markets,'' and added that markets should see some strong upward movem ents only after a month or 45 days.

The counters that are to be watched are Zee Telefilms, DSQ Software and Satyam Computer Services. Market grapevine has it that Zee Telefilms should see a strong upward trend during the week. Market players say that a ``big bull operator'', has been accum ulating in the counter.

Among the companies that are announcing their quarterly results are DSQ Software and Reliance Industries.

``Historically, we have seen the Reliance stock lose whenever results are announced immaterial of its actual performance,'' a senior BSE member said. The Reliance board is meeting on Thursday for results.

The FIIs continued to be net sellers of Indian equities. For the week ended July 14, their net selling remained in the negative territory at Rs. 121.50 crores.

The badla session at the BSE on Saturday saw the turnover rise by Rs. 150 crores and reach Rs. 2,608 crores. The average rates hovered around 14.5 per cent as against 14.3 per cent in the previous week.