Late rally on Lyons Range

By A Special Correspondent

CALCUTTA, JUNE 18. There was no perceptible change in the stock market sentiment during the course of trading last week on the Calcutta Stock Exchange. Cautious optimism aptly sums up the mood on the market. Evidently, end-account considerations weighed heavily on the minds of bulk operators, who were reluctant to enlarge their commitments, with the result that the volume of business shrunk somewhat during the major part of the period under review. Share prices fluctuated within a limited range and showed a downward tendency till mid-week. Thereafter a change for better emerged. The final session was exceptionally bright and prices staged a dramatic come back with software group and selected others in the limelight.

In tune with price movements, the CSE's 40-share index finished with gains at 2163.84 points compared to 2154.92 at close on June 9. The tendency at close was predominantly bullish and market operators felt confident that it will spill over into the next week.

Larger volumes were noted in the Satyam Computer scrip which swayed both ways to dip as low as Rs. 3,052.50 but bounced back elegantly to close with gains at Rs. 3,369.50 (Rs. 3,227.70). Yet another bright spot in the market was provided by State Bank of India which rallied to Rs. 234.90 from previous week's Rs. 223.50, while Ranbaxy shot into prominence closing at Rs. 597 against Rs. 559.80. Some of the cement shares such as ACC and Larsen & Toubro also settled above the previous close, while Tata Steel, Telco, Tata Tea, Reliance and Bata all ended the week in the minus territory. ITC which had dipped as low as Rs.691 in the early part recovered smartly to close at Rs.727.50 (Rs.700.50).

Elsewhere along the list changes were narrow and dealings were limited to small parcels mostly on account of bear interests with the result that their tendency was downwards. The scheduled weekly settlement was held on Thursday and the badla rate for the same stood at a moderate level, ranging between 15 and 19 per cent per annum. With bulls making their presence felt on Friday in several counters, prospects of the market maintaining its late buoyant mood looked bright for the next week.

The corporate news background was by and large encouraging. The industrial production has shown a visible upward trend as disclosed by the performance in April. The principal determinant of sentiments is foreign institutional buying. This source has been operating in the recent past on a somewhat low key basis but there is optimism that offtake on behalf of FIIs will begin to enlarge noticeably in the coming days. The expectations of the uptrend getting extended have been backed by the continued presence of a host of strong economic fundamentals, aided by the reasonably comfortable foreign exchange position and firm predictions of relatively better prospects for the corporate sector in the current year. These in themselves are likely to attract investors into the market helping it to retain the uptrend.

Thus clear signs of a mark up in share value in the ensuing weeks are evident. Somehow the FIIs have been delaying their active involvement in the securities market. But now the time is perhaps ripe for a quick entry by them as bulk buyers. The domestic institutions which have garnered sufficient funds through their various schemes are also expected to pick up larger parcels of growth oriented shares to provide the necessary support to the market which is already witnessing interest from individual investors of late. The level of badla rate at the turn of settlement on Thursday is also indicative of a bullish turn in the market. This might perhaps be realised next week.

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Section  : Business
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