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Markets rise, sentiment still jittery
Gains in blue chips saw the market surge ahead during the
week ended Thursday, August 26,2004. The major trigger was the easing of oil
prices and consequently, energy-dependent old economy stocks moved up. Tech
stocks held gains following the decent listing of Tata Consultancy Services.
The Finance Bill was passed in the Parliament without any hiccups and this further
boosted the sentiment. All these factors had positive bearing on the market.
However, there was some amount of caution on account of the ongoing truckers’
strike, now almost a week, which threatens to stoke domestic inflation, already
at a 3-year high. The strike is driving up food prices and factory costs, and
could hit industrial output if it lasts longer. Inflation continued to haunt
the sentiment as the marketmen expect the economy to be on a sound footing.
Rising inflation could deter the smooth road ahead. On Thursday, the volumes
on the bourses picked up towards the close of the session on account of futures
expiry. Shares worth Rs 1,757 crore were traded on BSE, as compared to Rs 1,967.84
crore on the day before. The breadth of the market was positive with 1,302 gainers
and 662 losers.
Textile stocks remained reasonably rangebound during the week. With sector reshuffling
continuing among funds, investors have begun moving into frontline stocks. Marketmen
expect a mid-cap rally in the coming sessions and this will usher in a boon
for textile midcaps like Zodica Clothing, Pantaloon Retail, Raymonds, Himatsingka
Seide, etc. Sentiment in textile stocks though appear to be jittery, post-2004
investors expect a much better valuations and growth story. For Investment perspective,
it appears that the market may remain in a rangebound mode between 4950 to 5350
levels. Sector shuffling may lead to battering of day traders. Investors are
advised not to take short-term positions. Take a medium term view around six
months to two years and then buy sound stocks based on future prospects. Avoid
day trading.
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