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Equity Markets Recover

When the trading started on Day 1 of the week ended January 20, it seemed as if investors would once again have a tough week. However, at the end of the week, Sensex crawled back to the positive territory

When the trading started on Day 1 of the week ended January 20, 2005, it seemed as if equity investors would once again have a tough week. Fear over fall in FII inflows and selling pressure turned the markets volatile throughout the week. However, at the end of the week, the 30-stock BSE Sensex crawled back to the positive territory—the index gained 0.15 per cent to close at 6183 points. Nifty, though, ended the week down 0.30 per cent at 1925.30 points.

Broader indices too felt the pressure of profit booking. While S&P CNX 500 fell 0.91 per cent, CNX Midcap 200 lost 0.99 per cent.

The scene was no different on sectoral counters. A bug seems to have hit the BSE IT Index, which ended its third successive week in the negative zone. The index, though, fell marginally this week to close down 0.86 per cent. Major IT stocks, including Infosys Technologies, Satyam Computers and TCS, lost over the week. TCS fell over 4 per cent. Wipro, though, ended the week up 1.09 per cent.

Pharma stocks failed to recover from their three-week losing streak this time also with the BSE Healthcare Index ending down 3.70 per cent. Pharma major Ranbaxy Laboratories, which had lost a whopping 10.88 per cent last week, ended down 8.08 per cent this time. Dr Reddy's Laboratories too shed over 3 per cent each. Cipla stocks though managed to gain nearly 2 per cent.

PSU and banking stocks too were under selling pressure. While BSE PSU Index lost 1.94 per cent, BSE Bankex ended the week down 0.86 per cent in the week ended January 20, 2005.

After losing for two successive weeks, FMCG stocks deviated from the overall market trend to stage a strong comeback in the week. The BSE FMCG index jumped 5.15 per cent. HLL and ITC gained over the week. ITC stocks surged over 8 per cent.

The combined daily average turnover on both exchanges fell 8.72 per cent to Rs 6,759 crore in the week ended January 20, 2005.

Both foreign institutional investors (FIIs) and domestic mutual funds turned net sellers this week. While FIIs pulled out Rs 110 crore over the week, mutual funds booked profits worth Rs 78 crore.

Outlook
The equity markets are likely to be range-bound next week. Like the past few weeks, volatility would rule the sentiments. Market would take cues from the third quarter results. With more results due next week, a clearer future trend might emerge out next week.