In a short week, which witnessed two festivals, markets went nowhere. The BSE Sensex clocked a 6.28 points (0.2 per cent) gain, whereas the S&P CNX Nifty ended the week up just 5.5 points (0.6 per cent). The only encouraging note was that technology stocks staged a comeback. Last week's major gainers, pharma and FMCG stocks lost their way this week. On the institutional front, both FIIs and domestic mutual funds were net-buyers. FIIs came back to the market after remaining net-sellers for the previous two weeks, whereas mutual funds continued last week's buying trend.
On the eve of Diwali, a brief ceremonial trading session of 75 minutes was held on Monday, in which index heavyweights like HLL and Infosys stole the show. However, HLL saw profit booking later and ended the week flat. Reliance Industries, which was up 15 per cent in the previous week, also moved in a narrow range of Rs 257-258.
Technology stocks dominated the market throughout the week largely on account of the initial gains in the NASDAQ. The BSE IT Index gained 5.3 per cent, mostly led by large-caps – Infosys (up 3.28 per cent), Wipro (4.4 per cent) and Satyam (2.75 per cent). Wipro attracted buying interest after it bagged an IT outsourcing order from Lehman Brothers, in association with Tata Consultancy Services.
The lag in the disinvestment of the two PSUs – Hindustan Petroleum and Bharat Petroleum – continues to drag down their share prices. The former lost 8.6 per cent and the latter ended the week down 3 per cent. Another disinvestment candidate, NALCO, lost 20 per cent as political opposition to its privatisation reared its ugly head once more. The Ministry of disinvestment has decided to put on hold the due diligence at the PSU's plants by potential bidders. Thus, with NALCO sell-off being postponed, the government is unlikely to meet its disinvestment target for this fiscal.
October was a good month for cyclical companies like cement and four-wheelers. L&T's cement deliveries in the month rose by 22 per cent and that of Grasim grew by 9.25 per cent over the same period last year. Consequently, L&T was the biggest gainer for the week among the cement stocks. In the four-wheeler segment, Mahindra & Mahindra's sales increased by 53 per cent and the Eicher Motors's sales jumped 58 per cent.
In the US, Alan Greenspan surprised the market with a 0.50 per cent cut in the key federal funds rate. The 1.25 per cent fed rate is lowest in the last four decades. This initiated initial buying interest in US markets, but President Bush's strong stance on Iraq pulled back those gains. The NASDAQ and Dow Jones finally closed the week unchanged.
Outlook
In the first week of Samvat 2059, as in the previous years, the market is hunting for a new trigger. The delay in disinvestmet process is further muddying the waters. And FIIs are yet make inroads into the market in a big way. Thus, in a somewhat gloomy environment, markets are likely to remain range-bound.
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