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Equities in Tailspin

The market was in a complete bear grip with all the sectors of the economy witnessing the squeeze. Looking ahead, quarterly results are expected to shape the direction of the market.

The market continues to remain bearish. The aggressive selling by FIIs and the weaknesses in the global market led to a 107 points (-3.5%) fall in the BSE Sensex. The NSE Nifty also ended the week down 29 points (-3.2%).

The foreign institutional investors have been on a selling spree for the last one-month. And this week they sold equities worth Rs 258 crore. Though some confidence was provided by the Indian mutual funds, yet not enough to guard the downfall.

The market dipped on every trading session led by Index heavy weights and technology stocks. HLL lost 3.7% and Reliance Industries shed 8.9%. The BSE IT Index, which had rebounded last week with a 1.3% rise, ended the week down 2.8%. However, the sector is expecting strong second quarter results. Wipro surged initially on its plan to acquire the R&D division of Ericssion, but over the week it lost 2% on profit booking. Except for Mphasis, all other tech pivotals ended the week in red. The heaviest losers were PSI Data System (-10%) and Satyam Computers (-5.7%). However, Infosys managed to close flat. The broader market saw some selling in the FMCG, Capital Goods and the Health Care Sector.

On the Public Sector front, HPCL, BPCL and other PSU's lost substantially on the first two trading days, but gained some grounds after the Prime Minister spoke in favour of disinvestment. However, the initial loss was so severe, that the later gains got nullified. Except for HMT, all the other PSU stocks were in the negative zone. HPCL dipped 3.5% and BPCL lost 2.3%. Other major losers were Bharat Electronics (-7.6%), EIL (-6%) and NALCO (-3%).

Pharma companies, which registered some gains in the previous week, lost steam this week. The BSE Healthcare Index close the week down 2.5%. The major losers were Wyeth Lederle (- 9.3%) and Dr. Reddy (-4.8%). Cement stocks attracted some buying interest following an increase in cement prices by Rs 10-15 per bag in north India. However, L&T lost 1%, Gujarat Ambuja shed 1.5%. Grasim's share price ended the week unchanged.

Among auto stocks, Hero Honda was the biggest loser (down 10.8%) on the news that the company recorded lower sales on a month-on-month basis as compared to August 2002. Bajaj Auto also lost 8.4%. However, the four wheeler segment lost relatively less --- TELCO (-1.5%) and M&M ended flat.

On the Wall Street, the profit warning by couple of companies led to a 5% fall in the NASDAQ and the broader Dow Jones lost 2.8% over the week. This was despite the fall in unemployment rate in US.

Outlook
Nothing seems to be going in favour of the market. All eyes are set on some positive news from the Government with regard to Disinvestment. Looking ahead, quarterly results are expected to shape the direction of the market.