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Textile stocks continue to move northward

There was a mixed sentiment during the week (ended Thursday, September 4) as the technical correction set in on Wednesday pulled the Sensex down by 80 points. But the following day, the Sensex recovered the lost points and closed the week 98 points higher at 4310 points. The irrational movement was characterised by change in Fll and MF inflows. The net inflow by Flls saw a drop to Rs 2091 crore in August as against Rs 2500 crore in June. Since a large portion of the turnover is governed by FIIs, the net inflow plays a very important role in the market sentiment. Though the Sensex closed in a similar territory of 4300 levels, the uptrend for the time being is witnessing correction.

Selection textile stocks continued the northward movement with RIL crossing Rs 400 mark, while Himatsingka Seide, Raymond, Pantaloon and Bombay Dyeing posted smart gains. The market has taken a positive approach on the retail story for textile stocks. This will continue to attract investors at different levels. Besides, Q2 results for textile stocks in the next week are expected to be buoyant. Market men expect the rally to continue. However, the volatility rose in the past few days with technical corrections halting the rally. For investors, it is advisable to focus on frontline old economy and textile stocks and avoid penny stocks.