Nestle, Dabour may witness firm trend

Sanjiv Shankaran

THE average badla rate for the market stayed around the previous week's level of 12.5 per cent per annum. The aggregate carry forward/badla turnover, however, showed a sharp increase of about Rs 243 crore.

The pattern of badla trading, as well as, last week's market movement may well mark an important phase in the market. The big news is that after the firm trend of the previous week rode on the back of old economy stocks, especially cement, and Fast Moving Consumer Goods (FMCG) stocks, traders seem to be willing to back old economy stocks in a big way in the badla session.

While its all too easy to get carried away by a few relatively minor uptrends, the swing in favour of old economy stocks could well be more significant than the first few signs convey.

Let us take a look at the pattern of badla trading. Among last year's drivers, the soundest one of them all, Infosys Technologies, showed signs of moderate trader interest. After a spell of weakness in the market, the stock may see a sign of firmness in near-term.

But the biggest gainers in trader interest, as measured by the increase in volume week-on-week, were old economy stocks such as Grasim, Ashok Leyland, TVS Suzuki and Tata Engineering. With this backdrop, let us take a look at individual stocks.

Among the cement stocks, ACC and Gujarat Ambuja witnessed relatively lower interest, while Grasim's volume shot up by a huge amount. It may be safer to be a little sceptical about cement stocks for the immediate future as there may be a reaction in the counters after a sharp rise recently.

Talk about regulatory investigation into likely cartelisation in the sector may provide a trigger for the correction.

Tata Engineering and Ashok Leyland saw a sharp rise in volume. Both the stock may witness a firm trend over some time.

Among the FMCG companies, Nestle and Dabur seem to witness a firm trend in the near-term. Hindustan Lever may display a correction after the recent rally.

ITC is another FMCG stock that seems to be on its way to a firm trend over the medium-term.

A handful of pharmaceutical stocks witnessed considerable trader interest, namely Pfizer, Wockhardt and Sun Pharma.