Market Report

Sensex ended the week down about 80 points this week. Banks were strong during the week on the hopes of a CRR / SLR cut which we think is away from reality. Many Mid caps were bouyant which included Rolta, Educomp, India Infoline, Financial Tech, Everest Kanto etc on the back them being included in the FNO segment starting next week.

Major movers in the indices were refineries and banks.The gainers in the week included Bajaj Auto + 6% BPCL +7%. State Bank +3%, The tech stocks and auto stocks were some of the losers / drags on the index. Infosys -3%, Mahindra -9%, ONGC -3%, Satyam -3%, Tata Power -4%, Wipro -4% were on the losing side.Bajaj Auto does a wheely. ; Sugar found Mayawati sweet ; SKF seems set for a frictionless performance !


Fundamentally speaking : Its the liquidity in the system which will be put under pressure in the next couple of weeks. ICICI bank's issue of Rs 20000 crores plus the DLF issue of Rs 5000 crores and then a couple of thousand crores in NHPC etc are the big ones tapping the market. Not to forget the Rs 2000 cr plus that the Maruti selloff has removed from the market. Interesting to note that ICICIs issue will have to have a dominant share of domestic money given the FII restrictions. Such a large issue will surely have to have the issue at a big discount. Thus the players will short the ICICI future and look to take the issue at the discount. This will keep pressure on the Index. The State bank results are slated for tomorrow and they will impact the beginning of the week. So all in all the fundamental triggers are lacking. Global cues in terms of the US economic news is not positive. Inflation is getting under control. However, now that UP elections are behind us the Government may look to hike fuel prices which could have its impact on inflation negatively.