Financial Daily from THE HINDU group of publications
Monday, Apr 22, 2002
Financial Daily from THE HINDU group of publications Monday, Apr 22, 2002 |
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Markets
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Commentary Columns - A Ringside View Political climate, dull results to check market movements Jayanta Mallick
LAST week, the Sensex lost 146.50 points from the previous week's close of 3510.90 points. The market capitalisation of the top 1,530 companies on Bombay Stock Exchange was pruned by Rs 19,868.64 crore. The week was marked by five days of adjournment in Parliament on the Gujarat issue and disappointing results from HLL, Wipro and HCL Infosystem, according to market players. HLL suffered a drop in market capitalisation of Rs 4,600.51 crore. ONGC, which has dislodged HLL from its top slot in market capitalisation, also saw its m-cap decline by Rs 1,190 crore over last week. In a fluid political situation, the market outlook as a whole may remain weak. "The cloud over communal scenario, highly affected business activity in Gujarat, and a question-mark over the smooth passage of some of the important Bills including the Finance Bill had a depressing effect on the market sentiment," said a BSE broker. The uneasy silence over the disinvestment process in the last one-month or so has also caused concern in market circles. The observers feel that the market has begun to take a re-look at the valuations of technology stocks after profit guidance from Wipro and Microsoft. The silver lining in the tech sector was provided by the NIIT counter, which improved on the expectation of ChrysCapital, a venture capitalist, expected to pick up a significant stake in the company. "The operators are gradually shifting focus to the oldies. Attempts at entering host of old economy stocks, which have been languishing for quite some time now, have started last week. In the coming week, this drive may gain momentum," said Mr Ajay Jaiswal of Lohia Securities. The steel sector suddenly witnessed a buzz last week. Even the most illiquid stocks in this sector got going. "The reported improvement in the March sales figures and easing of pressure on margins in certain steel items may not, however, sustain for long. Traditionally, the last quarter of a financial year remains good for steel offtake, mainly due to year-end considerations," a steel analyst pointed out. While PSU and automobile stocks were generally among the losers, there were selective gainers in pharma and media sectors such as Glaxo Smithkline, Knoll Pharma, Balaji Telefilms and Mukta Arts. "The trend of selection and value picking is here to stay in the troubled time when a clean sectoral call is difficult to come by," a NSE deal observed. With the Sensex support level around 3,500 points breached and FII activity at a low ebb on waning of country confidence, the market would desperately be looking for the next support level around 3350 to hold, technical analysts said. However, the market is likely to be range-bound, if there is no dramatic political turnaround this week.
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