After a buoyant start, the market tumbled due to lack of institutional support and heavy selling in old economy stocks. With a mild recovery lead by technology stocks in the last trading session, market's closed for week at its previous level. The BSE Sensex lost 8.7 points (-0.3%) whereas NSE Nifty ruled firm gaining 7.2 points (0.75%). However, concern over delayed monsoon weight throughout the week depressing market sentiment.
Institutional investors, the FIIs and domestic funds showed little interest in the market. FIIs, after being net-buyers for the previous two weeks, turned net-sellers and sold Rs 81 crore worth of equities. The domestic mutual funds, which have made a comeback last week with a net-purchase of Rs 58 crore, lost interest to sell stocks worth Rs 16 crore. Lack of investors' interest was also reflected in a 9% fall in the combined average turnover at both the exchanges.
However, in a flat market, many technology stocks made a comeback, taking cue from the strengthening NASDAQ, which was up 4.7% over the week. The domestic counterpart, BSE IT Index broke its five weeks of loosing streak and ended the week up 4.5%. Tech Major Infosys Technology was up 5.1% and Wipro gained 8%. The share price of Satyam Computers rose 1.91% as the company confirmed that the equity major Warburg Pincus had bought a 5.3 percent stake in it through an open market route. The second-rung tech stocks were also not left behind. Companies like Zensor Technologies and TVS Electronics were the major gainers among them.
Index heavyweights and old-economy tumbled. Reliance Industries was down 3.5% and HLL lost 3.9%. However, the share price of SAIL gained 8% as it reported a 30% rise in its sales for the first four months of the fiscal. Tata Group companies shares prices got a beating as A. F. Ferguson withdrew its report on the beleaguered Tata Finance. And to add to its woes Crisil downgraded the Tata Power's Rs 1000 crore NCD.
But, the good news came from the cement sector. The cement majors have reported higher sales in July. The cement dispatches have risen by 18% at ACC, 69% at Gujarat Ambuja, 31% at L&T and 38% at Grasim. However, it had little impact on their share prices. Except for L&T, which gained 4.7%, all the others ended the week in red. However, auto stocks continued their last week's upward journey. Bajaj Auto gained the most (7.8%) followed by TVS Motor (4.4%) and Hero Honda (1.9%). All the three companies have reported better sales in July.
In the primary market, the Union Bank is coming out with an IPO of Rs 18 crore on August 20, 2002 at a premium of Rs 6, i.e. at a price of Rs 16 per share. Whereas, TCS is planning to defer it's IPO, which was stated to hit the market this year. The reason: depressed stock market and the current Tata Finance debacle. Union Bank is the second government owned bank to make an IPO this year, following the March issue by PNB. The PNB issue was over subscribed 3-times and its current price is ruling at Rs 44.30 – a gain of 18% over its listing price. However, the other major issue of the year was that of I-Flex, whose market price is now trading below the IPO price of Rs 530.
Outlook
Almost after a month, the magnitude of fall in Sensex was less this week. But concern over the monsoon prevails. Despite strong fundamentals and low valuations market dynamics remain unfavourable.
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