Markets end on positive note

Krishnan Thiagarajan

Samvat 2058, under the Hindu Vikram Samvat calendar which began on a cheerful note last week continued during the early part of this week.

But the bullish sentiment evaporated in the latter part of the week. However, the buoyancy provided to the Sensex in the early part of the week helped the Sensex end on a positive note for the second week in succession. After a 3.3 per cent gain last week, the Sensex closed by 2.26 per cent at 3252.20 points at the end of this week. The sharp buying interest in the technology stocks of every genre, specially momentum and second rung stocks held sway over the market.

INTERNATIONAL MARKETS : Carrying on the buoyant trend recorded by Dow Jones Industrial Average and Nasdaq Composite Index over the past month or so, both the indices ended in the positive territory. Although the players exploited the profit booking opportunties in the early part of the week, a sharp ramp up in consumer spending in the Thanksgiving week, pepped up the Dow and Nasdaq on Friday, which was up by 1.25 per cent and 1.50 per cent respectively. The favourable impact of this may be felt on Monday's trading in the domestic markets. The Dow and Nasdaq appreciated by 0.94 and 0.24 per cent respectively to close for the week at 9959.71 and 1903.20 points.

At a macro level, an early end to the Afghan war, a probable recovery of the US from the recession by mid-2002 and strong consumer spending accompanied by low inflation has bolstered sentiment in the US markets. Clearly, both the Dow and Nasdaq have reflected this optimism.

DOMESTIC MARKETS : For the second consecutive week, most of the trading activity was centred around frontline / second rung software service stocks and key momentum stocks from the convergence triad of software, telecom and media.

Frontline software stocks such as Wipro, Digital GlobalSoft, Satyam Computers and NIIT continued to hog the limelight during the week's trading. The second rung software stocks which were trendsetters for this rally in software continued to dominate the trading activity for the fourth successive week. But the stocks which led the rally during the course of this week were the third rung and relatively unknown stocks from the convergence triad such as Cybertech, Avantel Soft, Anco Communications, Svam Software, Vision Technologies, Twinstar Exports and California Software. Besides, this the momentum stocks such as HFCL, SSI, DSQ Software, Zee Telefilms, Global TeleSystems, Shonk Technologies and Aftek Infosys attracted heightened market activity.

Otherwise, the trading activity was dominated by company specific developments. The stocks which attracted market interest were Castrol India, Dr.Reddy's, Ahmedabad Electricity, Zee Telefilms, Philips India, Blue Star. While Ahmedabad Electricity stock was fuelled by takeover rumours, the Blue Star was bolstered by a buy back offer at a price of Rs. 75 per share. Similarly, the second open offer by Philips India at an offer price of Rs. 105 to mop up the equity and delist the stock from the bourses perked up the stock during the course of the week. Among the losers were Castrol India and Dr. Reddy's Labs. While Castrol suffered on account of a decision to put off its buyback offer, Dr. Reddy's Lab declined on account of losing its marketing exclusivity over a certain drug.