The Telegraph
Since 1st March, 1999
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Early sparks keep hopes alive
- Modest end to blazing start

Mumbai/Calcutta, Nov. 1: Buoyed by the overnight turnaround, the new trading year on Dalal Street got off to a cracking start today, with the sensex whizzing past the 8000-mark within minutes of the moorat session of 2062. The bellwether index leaped 131.18 points in the first 15 minutes as Jeejeebhoy Towers welcomed Goddess Lakshmi with fresh purchases in key counters.

The initial euphoria, however, proved to be short-lived as investors availed of the opportunity to reap gains and started booking profits on the auspicious day of the festival of lights, trimming the gains substantially during latter part of the session. The market barometer finally closed the token session at 7944.10, etching a gain of 52 points over its last finish.

“The mood is euphoric,” summed up a manager of a leading mutual fund.

“History is on our side,” said Arun Kejriwal of KRIS, a portfolio advisory firm. “Last year on moorat trading, the sensex touched 6000. Today, we again crossed 8000. Next moorat, we hope to touch the magic 10,000 mark,” he added. Many traders also feel the same way.

Brokers in Calcutta are also quite bullish and expect the indices to hold after two buoyant trading sessions.

Ajit Day, a veteran stockbroker, is quite optimistic about the market. “If the market can hold on to the gains of the last two days, we might already have seen the bottom.”

However, leading brokers and analysts are not taken in by the two-day rally. “The ground reality is that this is a correction to a correction,” Kejriwal said.

The intensity of the fall last week has led many to believe that the correction may renew and the sensex can go down further.

Chandravadan Desai of CD Equisearch, said, “One cannot be too sure of the market movements in tomorrow’s trading session or in the coming week. Therefore, it is prudent to exercise caution in such a situation.”

Analysts feel that the markets will remain volatile in the short-term and take some time to settle down. Market gains will be interspersed with profit bookings, which will again drag down the indices.

On the recent 1,000-point correction of the sensex, Desai said, “Retail investors have not panicked in such a situation, which goes to show that Indian investors have come of age. Also, investors are flush with funds as they have booked handsome profits, considering the market levels during last Diwali and the current one.”

“This time around, investors have been eager to buy when the markets fell,” he added.

Though the premier bourses commenced the new year on a confident note, the buzzword was caution, if the correction from the intra-day high is an indication.

The bulls were on a rampage as the sensex surged to 8023.52 points from the previous close of 7892.32, before ending at 7944.10, a gain of 51.79 points.

Institutions and bulge-bracket investors punched in token orders in keeping with the day’s tradition. Many brokers and investors bought shares to pen in their first entries in the new ledgers.

Traditionally, investors buy limited quantity of shares that are enough to raise prices on a day of low volumes. Later, they sell at higher levels so that they can enter the new year with profits.

The nifty, the main barometer for the National Stock Exchange, touched an intra-day high of 2410.15 and ended at 2386.75, a gain of 15.80 points over its last close.

The volume of business on the BSE was pegged at Rs 766.80 crore in 75 minutes of trading today.

Reliance Industries recorded the highest turnover of Rs 71.91 crore followed by Titan Industries at Rs 58.81 crore.

Reliance Capital, now controlled by Anil Ambani, saw trades worth Rs 55.80 crore, while the turnover of Suzlon Energy, a maker of wind energy equipment, was Rs 29.54 crore. Reliance Industries, which announced impressive results last week, rose by Rs 3.55 to Rs 766.10, while Hindustan Lever, which had reported a double-digit growth in sales for two quarters, gained Rs 1.15 to Rs 162.55.

Bullion market dull

The bullion market today ushered in the new year on a cautious note with both the precious metals showing a sharp fall in moorat trading following gold’s downward correction in overseas markets, coupled with sluggish offtake at home.

The demand for gold and silver has fallen substantially during Diwali, dealers said. They attributed this partly to the serial blasts in the capital and high prices of the precious metals.

Standard gold (99.5 purity) was fixed at Rs 6,895 per 10 g, a loss of Rs 70 from the previous close of Rs 6965. Prices of pure gold (99.9 purity) dipped by Rs 65 to Rs 6935 from an overnight close of Rs 7,000.

Silver ready (.999 fineness) slipped by Rs 120 to Rs 11,795 per kg from yesterday’s close of Rs 11,915.

New York Comex gold and silver ended lower on Monday, driven down by a firm dollar and the better-than-expected personal income data. In Hong Kong, gold resumed lower this afternoon at $466.50 per ounce from the last close of $472.70.

Gold’s correction in international markets was mainly because of the dollar’s rise against the euro, which broke below $1.20 and long liquidation by funds following weakness in the euro and easing crude oil prices.

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