X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
And the rally continues… - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Sep 27, 2003

    And the rally continues…

    It was just ‘last week’ that the indices had touched the 4,100 levels on the Sensex and 1,300 levels on the Nifty. And look at them now. While the Sensex gained 3.9% during the week and is nearing the 4,400 levels, the Nifty notched gains of 4.9% to close in to the 1,400 levels. The gains this week seem to suggest that the bear party is over and the bulls are back in action, all ready to take the indices to greater heights.

    The week opened on a cautious note, as losses of the previous two weeks was fresh in the minds of investors. Despite the markets opening on a firm footing on the first trading day, the hangover of the previous two weeks soon took over investor sentiments, which led to the indices losing over 1% on Monday. Tuesday also opened weak but after witnessing some initial weakness, the bulls went on a buying spree across sectors, pulling the indices out of the trough. The buying followed through into Wednesday’s trading as the Sensex gained about 120 points, one of the ‘few’ trading sessions when it gained in 3-digits in 2003. The last time it had had triple digit gains was the day after the Mumbai bomb blasts.

    Top 5 gainers over the week
    COMPANY Price on
    September 19 (Rs)
    Price on
    September 26 (Rs)
    %
    CHANGE
    52-WEEK
    H/L (Rs)
    BSE-SENSEX 4,217 4,383 3.9% 4,474 / 2,828
    S&P CNX NIFTY 1,322 1,387 4.9% 1,431 / 920
    HCL INFOSYS 208 306 47.3% 316 / 75
    NOCIL 11 15 37.1% 15 / 5
    MOSER-BAER INDIA 327 407 24.3% 419 / 138
    TATA FINANCE 35 41 17.4% 62 / 14
    NALCO 104 118 13.2% 142 / 70

    However, during the entire week, concerns about trading on Thursday kept surfacing, it being the last day of derivatives settlement. On this day, the open positions on the derivatives segment have to be either squared-off or rolled over to the next settlement. Investors were worried about the consequences of a possible sell off on the bourses in the event of the open positions in derivatives not being rolled over. However, the markets did lose ground on Thursday. Friday was another big day, as the markets displayed immense strength.

    Top 5 losers over the week
    COMPANY Price on
    September 19 (Rs)
    Price on
    September 26 (Rs)
    %
    CHANGE
    52-WEEK
    H/L (Rs)
    HFCL 29 21 -26.4% 48 / 11
    SSI LTD. 137 118 -13.4% 151 / 54
    GTL LTD. 77 68 -11.4% 100 / 52
    PENTAMEDIA 10 9 -7.6% 33 / 7
    DSQ SOFTWARE 9 9 -6.0% 24 / 7

    The losers’ list above reminds about the one time favourites called as K-10 stocks ruled investor sentiments. However, the stocks were back in the news this week owing to BSE’s decision of shifting 9 stocks (it does not include DSQ Software) to the trade-to-trade segment, which is equivalent to downgrading them to the Z category of stocks. It must be noted, however, that this move by the BSE does not indicate any call on the fundamentals of the above-mentioned companies (if any), but is rather a part of preventive surveillance measures to ensure market safety and integrity. The other stocks are GTB, Silverline, Kopran, Aftek and lupin.

    Now for some news bits of the week:

    1. The big news for the week was about the unified licensing scheme (ULS), which would enable telecom companies, which have licenses to operate basic and cellular services, to migrate to other services without paying any extra charges. However, any decision regarding including national and international long-distance services under the ULS is still to be taken. Among others, a decision was taken to allow mergers between operators within the same circle and an increase in the foreign investment limit in the telecom sector to 74% (from the present 49%). Some key gainers

    2. HCL Infosystems Ltd., the largest PC manufacturer in the country, declared its audited FY03 results (June ending). It posted a net profit growth of 34% on the back of a strong 31% topline growth. However, for this period, the company witnessed a decline in operating margins by 70 basis points. The rise in profits was due to a substantial decline in depreciation and tax. The stock was amongst the biggest gainers amongst ‘A’ group stocks this week, notching gains of over 47%! However, we must caution investors here that the earnings visibility and consequently the profitability of the company yet seem hazy. However, software stocks closed largely in the positive for the week. Some key gainers

    3. The Organisation of Petroleum Exporting Countries (OPEC) has decided to cut its crude oil production by 0.9 m barrels per day, or 3.5%. This comes in the wake of rising concerns among the OPEC members about declining oil prices from the current $25 per barrel post the Iraq war. Prices have already dropped around 13% in the past month for OPEC's benchmark, due to Iraqi exports and rising output from Russia. ONGC, is likely to be a key beneficiary of rising prices as then it would be in a position to sell its crude at higher prices. As for other Indian oil companies, they are likely to pass on the effect of rising input costs (due to rising crude prices) to customers. Some key gainers

    Going forward into next week, the indications seem to suggest that there is still steam left in the rally from hereon and the markets ‘should’ soon (not necessarily next week) be testing their recent highs (made on September 9, 2003), which is just about 2%-3% up from the current levels. However, at the same time, we will be entering into the results month, which could play on investor sentiments. However, one thing is for sure, it is now important for investors to remain cautious and be selective of their choice in stocks. While the long-term Indian growth story remains intact, from hereon, it is the fundamentals that will takeover the sentiments on the bourses. Happy Investing!

     

     

    Equitymaster requests your view! Post a comment on "And the rally continues…". Click here!

      
     

    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    You've Heard of Timeless Books... Ever Heard of Timeless Stocks? (The 5 Minute Wrapup)

    Aug 19, 2017

    Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.

    Why NOW Is the WORST Time for Index Investing (The 5 Minute Wrapup)

    Aug 18, 2017

    Buying the index now will hardly help make money in stocks even in ten years.

    Trump Takes a Beating (Vivek Kaul's Diary)

    Aug 18, 2017

    Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.

    How To Read Your Mutual Fund Account Statement Correctly (Outside View)

    Aug 17, 2017

    PersonalFN simplifies the mutual fund account statement for you.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Profitable Investment in the History of the World(Vivek Kaul's Diary)

    Aug 8, 2017

    'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE SENSEX


    Aug 18, 2017 (Close)

    MARKET STATS