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Bleak Environ

Same old story repeated this week too. Depressed sentiments saw the Sensex improve marginally on previous week's level, saved largely by steel and media stocks. But the Nifty succumbed, was down 5 points.

This week, the stock markets lacked zip due to low investor interest. Many incidents -- including the news of serious illness of Reliance group's patriarch and another big bankruptcy and accounting scandal in the US -- caused some tremors initially in the markets. Owing to the Nasdaq bouncing back during mid-week, the BSE Sensex managed to square up losses by indulging in some bargain buying. Also, a 5.4% surge in GDP growth for fiscal-ended March 2002, lent support to old economy index heavyweights. In all, while the Sensex barely crossed the last week's level, Nifty was down 5 points.

Domestic funds continued to be sellers, dumping equities worth Rs 122 crore, FIIs bought a dismal Rs 87 crore worth of equities. Hogging limelight this week though were auto, steel and media stocks. Steel stocks continued their sparkling run on the back of reports that steel companies will be announcing another round of price-hike on July 1.

With no new investment opportunities in sight, the stock markets started on a dull note on Monday. The government's decision to allow a 26% foreign equity participation in print media and 100% in tea plantation companies, created excitement in the market, though restricted to these sectors. However, broader indices cold-shouldered the government's announcement, as it came along with the news of Reliance group chairman Dhirubhai Ambani being hospitalised following a stroke. Group heavyweights, Reliance Industries and Reliance Petroleum -- with a large weightage in the Sensex -- pulled down the index, as the mood turned jittery.

If that wasn't enough to send the markets into a bearish mode, another accounting fraud related to WorldCom, sent the global markets into a tailspin. The telecom major was charged for overstating its profits by $4 billion. Back home, technology stocks were hurt too with chances of increase in technology spending by US clients disappearing. However, the worst sufferer was VSNL, which dropped 10% during the week, as WorldCom owes VSNL about Rs 500 crore in dues.

Just when it looked like the Sensex was approaching its three-week low, a mild recovery in US markets, particularly the technology sector, resuscitated the Indian markets. While American investors' confidence has been shattered following a series of accounting frauds, Indian economy, notwithstanding the event risks, seems to be marching ahead. Difficult to buy, we understand, but strong economic growth through 2001-02 and with steel, cement and auto sectors picking up steam, we could safely infer that happy days are here again.

Outlook
Since the Jammu attacks on May 14, the Sensex has resisted going past the 3,350-mark. With first-quarter earning results around the corner, this could be a good time for investors to take a call on equities. Also, hopefully, this week things would be clear on the ITC-UTI front.