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Zig-Zag ..... Flat

The market flipped back and forth throughout the week led by technology stocks. BSE Sensex ended the week flat once again. While the earnings season still on its way with a lackluster impact on the sentiment, markets are expected to move in narrow range.

The market flipped back and forth, in and out of positive territory throughout the week led by technology stocks. Both BSE Sensex and NSE Nifty ended the week flat once again this week (+0.4%). Bullish FII's till last week turned net-sellers this week and domestic funds were almost inactive. The bearish sentiment lead to a 14 per cent fall in combined average turnover at both the exchanges.

Last week hectic activity in the NSE derivatives segment also faded with 7.5 per cent decline in average traded volume of stock futures. Though, in the interim on Thursday it witnessed an all-time high turnover of Rs 720 crore.

Market was upbeat at start of the week on renewed buying interest. But weak NASDAQ and concerns about leading companies' earnings pulled the market down for the following two days. BSE Sensex gained 52 points on Thursday backed by technology stocks but lost ground again with tech heavyweight Wipro's below expectation Q3 result coupled with big losses in IBM and Microsoft. Wipro posted a lower than expected earning of 6.3 per cent this quarter as compared to Q2. But, the selective buying in old economy and PSU stocks, on hopes of better performance this quarter provided the upper hand to the market through out the week. Bajaj Auto was the key gainer reported a 280 percent year-on-year jump in net profit for the quarter, surpassing market expectations.

In a dramatic move, SEBI has permitted unlisted companies to get listed on stock exchanges by issuing convertible and non-convertible debt securities. Till date, companies can get listed on the exchanges only through a public issue of shares. They can now get listed by making an IPO of debt instruments.

On the economy news, RBI's latest Report on Currency and Finance stated a soft monetary policy to boost inflation, which at its low has proved to be a disincentive to produce. It further contradicted that rather pump priming at the cost of fiscal deficit, the government should prioritize its spending and invest only in areas where the private sector participation will be encouraging. With the auction of 15-year paper for Rs 5000 crore this week, the government has crossed its borrowing target for the current fiscal by 2 per cent.

In US, mixed earning reports of leading software companies coupled with cautious forecast pulled the tech-laden NASDAQ down 4.6 per cent and the broader Dow Jones shed 2.2 per cent during the week.

Outlook
With earnings season still underway, the markets will tread cautiously in a narrow range. However, the positive is that market is gaining breadth against narrow tech lead rally in recent past. And economic issues will be in sharper focus in coming weeks in view of the receding war fear and run-up to union budget.