Tech stocks end the year in tailspin

Sanjiv Shankaran

THE average badla rate for the market was around 13.75 per cent per annum, about 25 basis points lower than the previous week's badla rate.

The aggregate badla turnover for the week, Rs 2,627 crore, was also lower than that of the previous week.

The week was marked by significant selling by Foreign Institutional Investors (FIIs). The weekly trend was in line with their investment pattern for December. FIIs were net sellers in December to the extent of Rs 577 crore. In the light of their strong influence on stock movement, the pattern of FII flows in the next couple of months will set the tone for 2001.

Technology stocks that began the year on a buoyant note, ended the year in a tailspin. Infosys Technologies, among the favourites of almost all fund managers, saw one of its lowest valuations in the last two years during the course of the week. The broad pattern was repeated in other technology stock counters.

For the medium-term, the outlook does not seem bright for technology stocks. While companies, such as Infosys, are likely to remain in most portfolios, it is debatable whether the stock will have anything close to spectacular gains that we have seen over the last two years.

Among the stocks that may see moderate gains in the near-term are Mcdowell and Reliance Industries. Both the stocks saw high interest among traders in the badla session. The charts show that stocks are poised for a firm trend in the near future.

In the last settlement cycle, Cipla registered an uptrend. In today's badla session, traders reduced outstanding purchase positions in the stock. The charts for the stock suggest that there may be some steam left, but the near-term trend is not clear. Investors willing to hold on to their position over a period of time may consider the stock.

Amar Raja Batteries' uptrend may come to an end. The stock has seen significant returns over the last few weeks. Carry forward positions have increased in the settlement to Rs 16.6 crore from the earlier level of Rs 10.7 crore. The charts, however, suggest that the uptrend is beginning to flatten, thereby providing an indication to book profits.