• PAGE ONE
• INDEX
• HOME

Recovery signs, a temporary blip?

Rajesh Chandramouli

THE week ahead could see equities moving sideways in the absence of buying support from foreign institutional investors (FIIs).

The volatility of the rupee has been one of the contributing factors for the ``damp sentiment''. A senior BSE member said that the FIIs might not step into the markets in the absence of stability.

He added that another factor responsible for ``no major fund inflows'' from the FIIs was that their (FIIs') redemption commitments outside India and hence the need to stay liquid.

The net FII investments for the previous week in Indian equities up to October 26 was Rs 238.40 crore.

Marketmen peg the movement of BSE Sensex in the coming week between 3,400 points and 3,900 points. The Sensex closed the previous week at 3,729.12 points.

Mr S. Raamassubramaniam of Venkatraman and Company said that the ``relatively better sentiment'' that prevailed over the last couple of days of trading should not be construed as recovery. ``This is nothing but a blip on the radar and not a recovery,'' h e said.

He, however, added that the market would witness scrip-specific activity.

Mr Anil Kumar Kedia of Viswanath Anil Kedia, said that if there was any increase in prices it would be only marginal and the market operators were not expecting anything sensational. ``The market is waiting for a positive trigger,'' he said, adding that a fall in stock prices from here might not happen that dramatically.

According to operators, the sluggish trend in stock prices may continue for some more time. ``Most of the mutual funds are sitting on cash and the FIIs are not pumping much into the markets. You cannot expect anything major to happen under these circumst ances,'' a senior BSE member said.

L&T and SBI would announce their quarterly results on October 30 and Himachal Futuristic Communications, Reliance Industries and Wipro on October 31.

Mr Mukesh Shah of Shah & Shah said that the market was finding it difficult to hold on to the present levels. ``I am rather pessimistic at this point of time and I continue to see the markets wobbling for some more time,'' he said.

According to reliable sources, Jardine Fleming has rated Reliance Industries among the top three regional picks from Asia. Morgan Stanley has told its clients that it rates Reliance as an ``outperformer'' and that the recent correction in the counter was an opportunity to ``buy''.

Meanwhile, sources said that Credit Lyonnais has given a ``sell'' signal for Gujarat Ambuja Cement, while Credit Suisse First Boston (CSFB) has upgraded NIIT to ``buy'' from ``hold''. Another company that had received a ``buy'' rating from CSFB was Smith Kline Pharma, sources said.