New-economy stocks still promising

Sanjiv Shankaran

THE average badla rate was about 9.5 per cent, higher by about 1.8 percentage points in relation to the previous week's badla rate. The aggregate badla turnover was about Rs. 2,026 crores, up by around Rs. 111 crores (6 per cent) when compared to last week's turnover.

The settlement that ended on Friday saw a moderate gain in the BSE Sensex. The Sensex closed at around 4,347 points, an increase of 155 points (4 per cent) in relation to the previous week's close. The net investment from foreign institutional investors (FIIs) appeared to be one of the major factors behind the rise in the stock market indices.

A reversal in FIIs investment trend also saw most of the frontline new-economy stocks rise. The badla turnover in these counters and technical indicators such as the moving average show that there may be some steam left in select new-economy stocks.

Infosys Technologies, Satyam Computer, Digital Equipment, Himachal Futuristic, Global Tele-Systems and Zee Telefilms may register a firm trend in the coming week.

A couple of stocks recorded a sharp uptrend in the badla turnover, namely, Hoechst Marion Roussel and ICICI. Both the stocks recorded a decline in the preceding settlement and one interpretation of the rise in turnover is that traders expect a correction soon.

Another stock that may be included in the category of Hoechst and ICICI is Larsen & Toubro. The stock's turnover increased sharply in the badla session in the backdrop of a decline in share price in the preceding settlement.

Among the other stocks that showed signs of displaying a firm trend in the coming week are Bombay Dyeing, Grasim Industries, Essel Packaging, and Corporation Bank.

Britannia displayed a sharp increase in badla volume, but the counter also saw backwardation.

Glaxo recorded a rise in badla volume in the backdrop of a weak trend in share price last week.