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Market remains flat; sentiment may look up

The market remained rangebound during the week (ended Thursday, September 2) as investors continued to wait and watch the developments. Key factor was the easing of international oil price on Wednesday, after eight straight sessions of decline. NYMEX crude prices rose to $ 44 a barrel after US stocks fell sharply to a five-month low. The easing of oil prices gave a breather to the market as inflationary pressure was hovering on the market sentiment. During the week broadly, front line stocks proved rangebound during, while small and mid-cap stocks were buzzing with activity in continuation of the trend witnessed in the past over one month. Amidst rangebound activity and lack of any significant news, the market remained flat at 5100-51200 levels. Sector reshuffling was another investment strategy by investors.

Textile stocks were relatively lackluster during the week. Frontline stocks largely remained rangebound. RIL, Raymond, Bombay Dyeing were in a trading range. While second rung stocks like Vardhaman Spinning, Siyaram relatively caught up with some investor interest. Other stocks which saw relatively good volumes were Clariant, Himatsingka Seide, etc. Institutions, however, were missing on these counters.

The market will continue to remain firm in the near term, but will not see a significant rise. The Sensex is expected to move in the range of 5100 to 5400 levels. Falling oil prices may not result in an inflationary situation and augurs well for the market sentiment. Investors are advised to keep away from mid-cap stocks as it has already seen a sharp rally in the last one month and may see some correction in the coming few sessions. The industry friendly foreign trade policy announced will give a boost to export- oriented industries and textiles happens to be a beneficiary in this segment. Investors looking for a good investment in textile stocks can buy scrips like Reliance Industries, Raymond, Arvind Mills, Himatsingka Seide with a one year perspective.