Feb 17, 2001|
Interesting week aheadů
After rising for almost a month from January 15th to February 9th the markets have taken a downturn. Over this period the Sensex gained 360.4 points or 9%. This week the Sensex and the Nifty declined by 67 points and 24 points respectively.
In the month of January the FIIs have been net investors for all the days except three. However, mutual funds have been net sellers year to date. For the week ended, FIIs invested Rs 8.6 bn while mutual funds were net sellers to the tune of Rs 4.8 bn. Despite this the markets fell, thus indicating that retail investors and momentum players could also have turned net sellers.
There were some unexpected gainers this week with FMCG and Pharma attracting the attention of the markets. There was a shift to these defensive counters towards the end of last year as the threat of a recession loomed large. However, this time around anticipated benefits from the budget helped perk up the Pharma sector. MNC Pharma was particularly in the limelight, as it would stand to benefit more from dilution in the DPCO.
HLL was a key gainer in the first half of the week as markets expected the company to deliver good results. The FMCG major more than obliged by beating expectations resulting in shoring up of sentiments towards the sector. Further, the counter witnessed a sharp rise on results day with profit booking entering on the very next. Industry heavyweight, Reliance, too has been gaining ground over the last three months and has overtaken Infosys in market capitalization. Interest in the stock has been rising since announcement of their second quarter results. This could be due to the impressive performance for the first nine months despite the difficult industry scenario. The petrochemical cycle too is expected to turn around by end of the year. Further the sale of 8% stake in RPL would result in increased cash flows by an estimated Rs 29 bn. The scrip could also have benefited as market participants shifted to the old economy as tech continued to melt.
Going ahead, for the markets to pick up steam the new economy might also have to start contributing. Further, FIIs should continue with their investment flows and the entry of mutual funds could result in additional fillip to the stock market. Monday, however, could see mixed trends as NASDAQ plummeted 5% or 128 points. Positive news for the market was the 50 basis rate cut announced by the RBI. Consequently, bond prices could see a rally at the start of the week. The reduced rate will help cut down the interest burden of corporates, however, it will be sometime before the effect are seen on the bottomline.
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