Over the three days the market was open this week, it gyrated wildly. We had a low of 2948 on Tuesday and a high of 3037 on Wednesday. Just when I thought we are on our way to a minor recovery to the first target of 3050, the market cracked badly on Thursday on terrible results of Wipro.
The market tried to rise on Wednesday on the back of corrective rise in Infosys and Hindustan Leverís results. Both were dubious rallies. Infosys has fallen sharply, argued many investors and is a great buy at these prices. Well, may be. We will see. On Thursday, as Wipro came in with its rude reminder, Infosys fell again. HLL managed to put a fine spin on its dismal results and the market bought into the stock heavily. HLLís sales are not growing and the figures of March 2002 has been reduced to make March 2003 operating profit look great. On the HLL counter too the day after looked different. The stock fell 3 per cent.
After the results of these biggies, I can sense a big sense of disappointment setting in. A few weeks ago I had said sector after sector is looking uninspiring. Software, two-wheelers and pharmaceuticals, last yearís favourites are looking tired. No new growth momentum is visible in any sector. There is a question mark over steel too, following the SARS problems in China, cancellation of some contracts and fears of a fresh global economic downturn. All this was indirectly reflected in the market mood on Thursday. While Wipro spoiled the market in the opening minutes there was complete lack of buying in all counters throughout the day. At one time just 12 stocks in the nifty fifty were in the positive. Almost all frontline companies were in the red.
I was expecting a bounce to 3050 and higher still to 3100. Probably we will have to wait. I was also expecting cash to move into stocks like Tata Iron and Steel, Telco, Mahindra & Mahindra, Reliance Industries Limited, State Bank and some drug stocks. However, this will have to be revised now. Money may move into stocks even more selectively. My list is now State Bank of India, some profitable government companies like Bharat Electronics, Bharat Earth Movers, Ranbaxy and perhaps Telco. However, the general direction is still down, probably below 2850. We will certainly see a bounce before that. It will be an opportunity to sell. Reliance, which has the maximum weight in the index looks like cracking slowly.