Equity markets still seem to be searching for direction despite the results' season coming to an end. For the week ended October 29, 2004, the Nifty ended up 0.40 per cent, while the Sensex closed up 0.55 per cent. Even in the broader markets, the S&P CNX 500 gained 0.29 per cent, while the CNX Midcap 200 gained 0.86 per cent.
However, this is not to indicate that the week was completely listless. The markets began the week on a weak note on Monday with the Nifty losing 1.26 per cent or 22 points. The Sensex also lost 60 points or a per cent. This was compensated by more than one per cent gain for Nifty and Sensex on Tuesday. The markets continued their gains on Wednesday and Thursday, after witnessing a fall on Friday.
Among the sectoral indices, the BSE IT Index gained the most with a 3.58 per cent rise. With this, the index has gained 7.86 per cent in October.
The BSE Bankex rose marginally by 0.46 per cent despite a hike in the repo rate by the reserve bank. There was some good news for the banking sector with news that the norms for takeover of private banks by foreign entities may be relaxed.
In October, the Nifty gained 2.37 per cent, while the Sensex gained 1.59 per cent. Tata Steel came out with good numbers again. The gain was also extended to Steel Authority of India with the company declaring a 245 per cent growth in profit for the first half of the current fiscal. The trend was also extended to other metal companies such as Hindalco and Nalco, which have shown a 47 per cent and 10 per cent growth in net profits, respectively.
The metal stocks, however, witnessed a fall in prices owing to the fears that commodity prices may weaken on possibility of slowdown in Chinese demand. On Friday, Hindalco fell 3.3 per cent, Tata Steel tanked 2.4 per cent, while SAIL ended down 1.5 per cent. The companies that derive a higher proportion of their sales through long-term contracts may be better insulated from any decline in prices.
Among the other results, Reliance Industries quarterly results did not enthuse the markets. The response to ACC's numbers was also tepid.
Outlook
With no clear movement in the indices, the markets seem to be searching for the next trigger. Given a run up in the technology stocks in the last couple of weeks, investors may do well to exercise caution before investing here. Though the international oil prices have cooled recently, the prevailing price of $51 is still above what the companies are getting. This may exert an upward pressure on the domestic oil prices and the inflation.
SAL Steel IPO is scheduled to open November 1. With the steel companies declaring good results for the second quarter, the response to this IPO would be of particular interest.
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