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Friday, March 09, 2007

MARKET MOOD


Swinging Sensex ends flat

In my place, in my place
Were lines that I couldn't change
I was lost, oh yeah

The bulls have been struggling to find some sunshine during this sun outage season. While they seemed to be in darkness for most part of the week, on Thursday they appeared out of nowhere and took the Sensex past the 13K mark, only to fall on Thursday. Amid these huge gyrations on the bourses, the bulls appear to have lost, tired and under prepared as the tussle between the Government and Cement Manufacturers kept intensifying.

Despite sessions of occasional spurts, trading over the week was highly volatile with the Sensex hitting a peak of 13145.72 and a low of 12344.44 before settling flat at 12884.99. While, the NSE Nifty touched a peak 3795.70 and a bottom of 3554.5 before closing at 3718, down 9 points from previous week's level.

Selling was seen across the sectors with Cement stocks leading from the front. Banking, FMCG, Metal, Capital Good, Small- Cap and Mid-Cap stocks were among the other major losers.

However, IT stocks bucked the negative trend and managed to close higher. Not even stability across the global markets in last few trading sessions failed to inspire the bulls. Making things worse at the moment is the inflation, which accelerated after two weeks of slowing down, as prices of cement and other manufactured products rose. India's Inflation rate was 6.10% in week ended Feb 24 against expectation of 6.03%.

Cement stocks lost further ground after cement companies agreed to hold prices of the building material for a year. Commerce minister said, Cement makers will hold prices "even if there are increases in input prices." Both mid-cap and large cap stocks witnessed heavy selling. Index heavy weight ACC declined over 8.5% to Rs780, the scrip was the top loser among the 50-scrip's of NSE Nifty, Grasim was down 2% to Rs2071, Prism Cement fell over 6.5% to Rs32 and India Cement dropped over 9% to Rs153. However, Gujarat Ambuja rose marginally by 0.3% to Rs110.

Capital Good stocks were also on the receiving end. Punj Lloyd was down over 4% to Rs755, Siemens fell over 5% to Rs1038, ABB declined 1.5% to Rs3487 and BHEL edged lower by 0.3% to Rs2095.

Fears that rising interest rates would make Car loans more costlier brought the Auto stocks lower. Tata Motors declined over 2.5% to Rs755, Bajaj Auto fell 2.3% to Rs2489, Hero Honda was down 0.3% to Rs690. Among the Mid-Cap stocks, M&M fell over 5% to Rs732 and TVS Motors lost 5% to Rs587.

Selling continued among the mid-cap and small cap stocks with most of the scrips hitting lower circuits on regular basis. Small Cap index was the top loser among the key indices, the index fell nearly by 6% over the week. CNX Mid-Cap stocks dropped nearly by 4% during the week Hinduja TMT fell over 10% to Rs511, Patni declined over 6.5% to Rs391 Madras Cement lost over 7% to Rs2598 and Gammon India lost over 3.5% to Rs1031.

Selling was also seen across the Metal stocks after the Government asked the steel companies to roll back the prices. Tata Steel lost by over 2% to Rs433, SAIL was down by 2.2% to Rs104, JSW Steel dropped by over 4% to Rs452 and Jindal Stainless slipped over 7% o Rs119.

Selective buying was seen across the IT stocks, on optimism that new taxes would not impact earnings of the tech companies in the long term. Index heavy weights like TCS, Infosys and Satyam Computer led from the front holding off the markets from a major fall. Satyam Computer rose over 2.5% to Rs438, Infosys was up by 1% to Rs2123 and TCS added 0.4% to Rs1212. However, mid-cap stocks like Patni and Financial Technologies declined over 4% each.