The Hindu Business Line : Market may remain range-bound

THE overall flattish behaviour of the stock market last week coupled with low volumes is instructive. Both the Bombay Stock Exchange's Sensex and the National Stock Exchange's S&P CNX Nifty stocks showed falling turnover. This marks a shift in the trading method in a week flooded by quarterly results of many top corporates.

According to Mr Ajay Jaiswal of Lohia Securities, the result weeks of the January 2001 were one of hectic activity and volatility, particularly the Thursdays and Fridays. ``The after-scam changes such as introduction of rolling settlement made all the difference,'' he feels.

The operators have also changed their strategy to suit the needs of the time. The tendency towards creating an omnibus bandwagon to drive the market either way is absent, says a National Stock Exchange broker.

``In a day-traders' market, the buzzword is squaring off at the end of the day. It is apparent that players had driven up the market in the past few weeks in the run-up to the results dates. The discounting and profit-booking were timed last week to extract maximum mileage,'' a BSE broker pointed out.

The fact that FIIs were sellers except for Thursday has contributed to the circumspection. The market generally seemed to be waiting for the remaining results to come before a fresh guard.

That prices moved within a narrow range was evident in the indices. While the Sensex closed 26 points down, the Nifty was down five points. The tech indices — BSE IT index and NSE Teck — declined by 14 and 9 points respectively. This was indicative of the measured negative outlook of the market towards tech sector.

The interesting factor was that some second-rung tech stocks did relatively better in terms of price and volume. The news that the HCL Tech was subject of income-tax searches proved negative for the stock. ``Market moves are now stock-specific instead of the sentimental waves seen after Q3 results of the previous fiscal''. However, the positive factor this time around is that the market has shed the tunnelled view regarding tech sector.'' The old economy stocks are no longer pariahs. "Indications from the last few weeks' trading point to some stocks of this class returning to the attention zone depending on the fundamentals and developments,'' says Mr Ajit Day of Dayco Securtities.

The market this week is expected to reflect economic uncertainties before the Budget and also the threat perception of military tension with Pakistan. ``The market is unlikely to move within a range broader than five per cent,'' says Mr S Sharma, a NSE dealer.

The stance of FIIs will help in shaping up the volume trend this week. ``The UTI's restricted market-moving capability and low-key operations of the big-time players may swing or drift the market with pushes and pulls by the FIIs,'' observes an analyst.

In the last few years, FIIs have been seen as aggressive buyers during end-January and early February. This year, observers feel, the activity level of foreign institutions shows a lack of the usual bullishness. ``Worries about Indian economy, the border tension as also depressing trend in the emerging market seem to hold portfolio investors back a little. Lack of firm, positive indications from the Government and the private sector at this point of time is making them to limit their commitments,'' opined a noted institutional broker.

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